UNC Health Care, Chapel Hill, N.C., has rejected the unsolicited offer worth more than $875 million that WakeMed Health & Hospitals, Raleigh, N.C., made for UNC's Rex Healthcare, Raleigh, according to a UNC news release.
UNC Health Care rejects WakeMed bid
UNC Health Care's board unanimously rejected the offer today after meeting to hear a report from a special committee of the board that investigated the offer, according to a letter from Dr. Richard Krasno (PDF), chair of the UNC board, to his WakeMed counterpart, Thomas Oxholm. The letter called on WakeMed to respect the UNC board's decision, cease its public relations and lobbying efforts regarding the proposed acquisition and UNC Health Care's state funding, and re-start a dialogue about the partnership that places UNC medical students for rotations at WakeMed's facilities.
In UNC's news release, Krasno said selling 431-bed Rex to WakeMed would hurt patient care, increase its costs and compromise the financial stability of UNC Health Care and the university's medical school.
Bill Atkinson, president and CEO of WakeMed, said in an interview that he didn't consider the matter closed, as the rejection came from the UNC Health Care board, not the university's board of governors or state elected officials who oversee the system. "We don't want to be at odds, but at the same time, these are important questions about being on a level playing field, not only in Wake County but across North Carolina." Those questions include the role of government in a competitive healthcare environment, he said.
Atkinson also questioned the release of UNC's decision as many North Carolinians prepared for the landfall of Hurricane Irene.
In November 2010, WakeMed filed a public records request with UNC Health Care seeking documents related to Rex Healthcare's physician relationships. In May, WakeMed offered to pay $750 million in cash and assume Rex's debt in order to buy its local rival. Rex Healthcare had $127.3 million in debt outstanding, including the portion due within 12 months, as of June 30, according to a disclosure Rex made to bondholders (PDF).
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