Jameson Receives, Rejects 3 New Merger Proposals
NEW CASTLE, Pa. – Jameson Health System and the office of the Pennsylvania attorney general remain at odds over the future of this city’s only hospital now that three more bids have been received for the system and rejected by Jameson as unsuitable.
“We are disappointed at [the attorney general office’s] disregard for the long-term sustainability of Jameson under the re-bid proposals,” the health system said Thursday in a statement.
Jameson reported it has received three new bids in addition to the proposal it announced last year to merge with University of Pittsburgh Medical Center.
After assessing the three new proposals, Jameson’s board did “not feel that any of the three bids received currently meet the complete criteria needed to provide Lawrence County the services and support it needs,” according to the statement.
The three new bidders were not identified. UPMC, which has agreed to invest nearly $70 million in the ailing system, has extended its offer to Dec. 31.
A spokesman for the attorney general told The Business Journal in August that “public protection lawyers have seen some competitive issues that may arise from the UPMC merger,” and are concerned about the disposition of Jameson’s charitable assets.
Jameson’s board continues to favor merging with UPMC.
“While this merger is still a possibility, it is clear that the Pennsylvania attorney general is not supportive of this agreement and has continued to request that we consider other partners,” the health system said Thursday.
Jameson said its advisory team, Chicago-based consultants Ponder & Co., “objectively presented” the three new bids to the Pennsylvania attorney general’s office, which “did not acknowledge the material shortcomings of these proposals.”
At the urging of the attorney general, the hospital system said it is “now going back to all of the bidders to discuss ways we may be able to work through the issues in their proposals and arrive at a solution that will position Jameson for long-term success. This will include discussions about capital structure, plans for servicing debt, how the newly-formed entity would be run, and long-term plans for Jameson.”
Jameson said it expects to make an announcement “soon regarding a strategic partner.” But the Jameson board of directors “won’t settle for a deal that doesn’t meet the necessary criteria and is not the best option for our community’s health-care consumers. Our Board’s focus is on selecting a path that will position Jameson Health System and Lawrence County for long-term stability and prosperity.”
In 2014, Jameson had total operating expenses of $110 million compared to net patient revenue of $105 million. This summer the hospital stopped delivering babies and other cutbacks are in the works, officials said.
BACKGROUND:
At AG’s urging, Jameson Seeks More Merger Proposals
Access to Care Is Basis for Seeking More Jameson Proposals
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