Hospital's surprise takeover bid could signal a turning M&A tide
Raleigh, N.C.-based WakeMed Health and Hospitals has made an unsolicited and potentially hostile takeover bid for Rex Healthcare in a deal that may foreshadow other surprising hostile takeover attempts of hospitals and hospital systems.
WakeMed has offered $750 million for Rex, which is owned and operated by the University of North Carolina Health Care System. The assets include 433-bed Rex Hospital in Raleigh, two skilled nursing facilities and a variety of outpatient satellite centers.
According to a letter sent to the Rex board by WakeMed, the deal would eliminate the duplication of services in Raleigh and the surrounding community and would provide a "significant return on investment" for UNC Health Care. WakeMed had been considering its offer for several months, the letter said.
Nonetheless, WakeMed's proposal took Rex's board of trustees off-guard, and chairman Dale Jenkins considered it a hostile takeover. "Certainly this is an interesting turn of events. Rex is not for sale -- hasn't been for sale," he said during a video-recorded press conference.
According to a statement issued by WakeMed, "healthcare consumers in the Triangle area would strongly benefit from this arrangement. The combination of the two systems would offer significant benefits to patients, physicians, taxpayers, the community-at-large and the State of North Carolina."
The two systems have had an often bitter rivalry, trading charges regarding physician poaching and quality-of-care issues.