California Attorney General Kamala Harris gives conditional approval for largest nonprofit hospital transaction in state history
Long months of uncertainty have come to an end as California Attorney General Kamala Harris, late on Thursday, gave her conditional consent for the biggest nonprofit hospital transaction in history of the state. The transaction was the first one that involved a hedge fund.
Under the provisional approval given by Harris, BlueMountain Capital Management has got permission to invest in the disturbed nonprofit Daughters of Charity Health System, with an alternative to buy the Los Altos Hills-based hospital chain post three years.
However, the $21 billion New York hedge fund also needs to agree to similar demands, placed on Prime Healthcare Services' 2014 offer to purchase the Los Altos Hills-based hospital chain for $843 million. In March, the for-profit Prime left the deal saying that Harris' ‘unprecedented’ contingencies were quite onerous.
In a prepared deal, Harris said, “This approval includes strong conditions that will maintain the charitable purpose of the Daughters of Charity Health System, ensuring that low-income Californians will continue to have access to critical health care services, including emergency, trauma, surgical, and reproductive health services”.
BlueMountain spokesman said the company was now evaluating the terms, which involve keeping all but 1 of 6 Daughters facilities working for a decade; sustaining all Medi-Cal bonds and services at every site for a decade, and giving charity care at historical levels.
The conditional approval by Harris will permit BlueMountain to spend $100 million for the choice to buy Daughters. The new health care management company of hedge fund, known as Integrity Healthcare, is going to run the hospital chain, which will be renamed Verity Health System.
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