NASHVILLE, Tenn. (WANE) The parent company of Lutheran Health Network has rejected a multi-billion-dollar offer from a physicians group to buy the hospital system.
Community Health Systems’ board of directors on Monday rejected a $2.4 billion offer submitted by a group of 10 local doctors. In a statement, the board said the offer was “at least $1 billion below the fair market value” of Lutheran Health Network.
The offer also did not detail whether the local doctors would honor Lutheran’s plans to invest $500 million to improve nearly every arm of the network, announced just more than a week ago.
“The physicians have failed to satisfy any reasonable criteria of a legitimate offer,” CHS officials said in the statement.
CHS had until noon Monday to respond to the offer, according to reports.
In was November when a group of 10 local doctors – referred to as Fort Wayne Physicians, LLC – submitted an offer to CHS to buy out the hospital. It’s not clear if the offer was for the entire Lutheran Health network or simply the Fort Wayne property.
CHS said in the statement it initially declined to sell Lutheran Health Network, but ultimately agreed to consider a “serious, full market value offer.”
The company said of Fort Wayne Physicians, LLC: “They have not done that.”
CHS said the local doctors never signed a non-disclosure agreement, never produced a qualified buyer, never identified which assets it wanted to buy out, and never submitted a written offer for evaluation. Fort Wayne Physicians also demanded CHS pay its legal fees and financial advisers, the statement said.
Lutheran Health Chief Operating Officer Scott Weiskittel told NewsChannel 15 the hospital was ready to move forward.
“We are going to continue to serve the patients of the community like we always have,” said Weiskittel. “Lutheran Health Network has been around for decades and our commitment is to continue to serve the patients (and) the families in the communities within our areas.”
Lutheran Health spokesperson Geoff Thomas told NewsChannel 15 the hospital would not comment on the buyout attempt, even if it was permitted to do so. He said from now “until ever,” questions about financial ownership would be directed to CHS. Calls and emails to CHS’s corporate communications team have not been returned.
City Councilman John Crawford, a local physician, told NewsChannel 15 he was “disappointed” the buyout was rejected, and added that it would have been far more beneficial for the citizens of Fort Wayne to have profits generated by Lutheran, stay here. Crawford said patient care would be stronger with local ownership. “It’s a no-brainier that it’s better for the area that all those profits generated are used here and second I think that, even though the care delivered at Lutheran is excellent and I’m sure they’ll continue to produce excellent care, they thought they could make it better if it was locally controlled and all the money reinvested here.”
Crawford hopes this isn’t the end of the discussion. “Hopefully negotiations can start up again because once you say no it doesn’t mean you will say no to the next offer.”
Weiskittel said he doesn’t know if it’s done or not. “Lutheran is a great family. It’s a great medical family that’s taken care of families and I’m excited. I feel blessed to be part of such a great team.”
Rep. Jim Banks (R-3rd) issued the following statement moments after news of the rejected offer broke:
“The Lutheran medical community has served our region with excellence for many years, always committed to the highest quality of care. I’m pleased doctors in our community have recognized the need for change in leadership, and I support their bid to buy the network from Community Health Systems.”