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Forum, possible new suitor to meet
By WILLIAM K. ALCORN
YOUNGSTOWN
CHS affiliates own, operate or lease more than 120 acute-care hospitals in 29 states.
CHS, through its Quorum Health Resources subsidiary, provides hospital management, consulting and advisory services to more than 150 independent community hospitals and health systems in the U.S.
CHS-affiliated hospitals are the sole provider of health-care services in more than 65 percent of the markets it serves.
2009 revenue was $12.1 billion.
2009 earnings per share were $2.64 from continuing operations.
Source: CHS web site
A second potential buyer of the bankrupt Forum Health health-care system has emerged less than a month before the court-scheduled Aug. 5 sale.
Community Health Systems — a major health-services provider that reported $12.1 billion in 2009 revenue — is Forum’s potential new suitor.
The for-profit company’s affiliates own, operate or lease more than 120 general acute-care hospitals in 29 states.
According to the CHS web site, it owns Affinity Medical Center in Massillon, which was a nonprofit corporation before its purchase by CHS. The hospital remains nonprofit, an Affinity spokesman said. Forum is a nonprofit corporation.
“We were notified by Forum Health legal counsel that Community Health Systems wants to meet,” said Deborah Bindas, representative of American Federation of State, County and Municipal Employees Ohio Council 8. AFSCME Local 2026 represents registered nurses at Forum’s Trumbull Memorial Hospital in Warren.
Eric Williams, president of Youngstown General Duty Nurses Association/Ohio Nurses Association at Northside Medical Center, and Thomas Connelly, president of Local 2026, also said they have been told by Forum to be ready to meet with a potential buyer soon.
Williams said Tuesday that meetings with the new potential bidder are scheduled “within the next few days.”
Connelly said his union was told by Forum to “be ready to talk, and soon” to other potential bidders.
Telephone calls requesting comments from Ardent Health Services — to date the only firm to submit a bid to buy Forum — were not returned. CHS had no comment.
Forum would not confirm that CHS is the second company to become a potential bidder for Forum.
“After thorough evaluation of all options, the Forum Health Board of Trustees determined last month that the best possible outcome for Forum Health, our creditors and the community is a sale to a new owner. To this end, Forum Health has entered into an agreement to sell substantially all of its assets to Ardent Health Services,” according to a written Forum statement Tuesday afternoon.
“As contemplated by the agreement with Ardent, and as is usual for sales in bankruptcy, there is an opportunity for other parties to make a higher bid for the assets of Forum Health. Accordingly, we are encouraging other parties to perform due diligence and to submit a competing bid.
“If one or more qualified parties emerge, complete all of their due diligence and meet the necessary requirements to be deemed a qualified bidder, an auction will take place on Aug. 5 to determine the highest and best offer to purchase Forum’s assets.
“All of these actions are part of Forum Health’s efforts to obtain the highest and best value for its assets, and achieve the best possible outcome for its creditors and its other constituencies. We remain hopeful that the court and our creditors will adopt the result of our sale process as a solution for our hospitals, our caregivers and our patients,” Forum’s statement concluded.
Ardent, with headquarters in Nashville, Tenn., agreed in June to purchase Forum for $69.8 million. In addition, Ardent pledged in its purchase proposal to hire Forum’s employees, keep its three major hospitals open and invest $50 million to $70 million over five years on renovations, new equipment and other upgrades.
Forum’s major facilities are Northside, Trumbull Memorial and Hillside Rehabilitation Hospital in Howland. Forum filed for protection under Chapter 11 of the U.S. Bankruptcy Code in March 2009.
Before submitting its bid, Ardent negotiated concessions from Forum’s unionized employees detailed in memorandums of understanding, which MBIA Insurance, insurer of forum’s major bond holders, tried in court to access.
Shawn Riley, a Forum attorney, said during a recent hearing in U.S. Bankruptcy Court that initially there were 58 potential bidders for Forum Health, which was honed down to five by Forum’s board, with Ardent emerging as the leading bidder.
AFSCME’s Bindas said she believes Community Health Systems was one of the companies that originally had expressed interest in buying Forum.
All of the union leaders say they are willing to talk to any bidder. But the bidders have to be serious. There are a lot of jobs and a choice in health care in the area at stake, Bindas said.
If CHS is serious, they are coming into the game late, and there is a lot of work to do, she said.