Suitors Line Up for Newly Available Nonprofit Hospital Chain

Several potential buyers are interested in purchasing some or all of the six Daughters of Charity hospitals following the collapse of a bid by for-profit Prime Healthcare Services to take over the entire California chain, according to the San Jose Mercury News.

While the Catholic health system is not identifying suitors, a Prime executive told the newspaper that the company might still bid for one or more of the nonprofit medical centers in the Los Angeles and San Francisco Bay areas. Alecto Healthcare Services — another for-profit provider that is owned by the brother-in-law of Prime CEO Prem Reddy — also confirmed interest, as did the Santa Clara County, Calif., government and New York private-equity firm Blue Wolf Capital, which previously pursued Daughters.

California Attorney General Kamala Harris said a new buyer might not be held to the same conditions she imposed on the proposed $843-million sale to Prime, including a requirement that the Daughters hospitals continue to operate as is for 10 years. “Each case is unique to its facts,” said Ms. Harris, who would have to OK any sale to a commercial entity. Prime blamed the attorney general’s terms for its decision to abandon its deal to acquire the financially struggling chain.