Posted: Tuesday, July 01, 2008
Tenet reaches settlement with HCP
Hospital operator Tenet Healthcare Corp., which owns Des Peres Hospital and Saint Louis University Hospital in St. Louis, Mo., said it has reached a settlement with HCP Inc., a real estate investment trust that owns seven hospitals leased by Tenet subsidiaries.
Dallas-based Tenet (NYSE: THC) said the agreement will resolve the pending litigation and arbitration proceedings between the two companies. Tenet also agreed to continue or extend leases at four HCP-owned hospitals and not renew leases at two other hospitals. Des Peres Hospital and Saint Louis University Hospital are not affected by the agreement.
As part of the settlement, a Tenet subsidiary has agreed to buy the HCP-owned Tarzana, Calif., campus of Encino Tarzana Regional Medical Center in the Los Angeles area. It will then sell the 245-bed hospital to Providence Health & Services-California.
Providence Health has agreed to continue to operate the Tarzana campus as an acute care hospital and maintain its emergency department and most of the hospital staff.
The sale is expected to be completed during the third quarter, subject to regulatory approvals. Financial terms were not disclosed.
"We are pleased we can bring resolution to the HCP issues," said Trevor Fetter, Tenet's chief executive officer and president. "The sale of the Tarzana campus has been four years in the making, and we now have successfully reached an agreement with a qualified operator to continue the important mission of this hospital. The completion of these divestitures and those announced earlier this month will conclude our divestitures in California. We look forward to growing our services and making investments in our remaining hospitals in the state."
Tenet on Monday completed the sale of two acute care hospitals, in Garden Grove and San Dimas, to Victorville, Calif.-based Prime Healthcare Management Inc. for $41 million.
Tenet said the transactions will not affect its outlook for 2008 and 2009 operating results or
Also as part of the settlement with Long Beach, Calif.-based HCP, Tenet will continue or extend leases at the following hospitals:
Frye Regional Medical Center, a 355-bed acute care hospital in Hickory, N.C.; lease renewed through February 2014 with options to renew through 2039.
North Fulton Regional Hospital, a 202-bed acute care hospital in Roswell, Ga.; lease renewed through February 2014 with options to renew through 2039.
NorthShore Regional Medical Center, a 165-bed acute care hospital in Slidell, La.; lease expires May 2010 with options to renew through 2040.
Palm Beach Gardens Medical Center, a 199-bed acute care hospital in Palm Beach Gardens, Fla.; lease renewed through February 2014 with options to renew through 2039.
The hospitals owned by HCP with leases that will not be renewed are:
Community Hospital of Los Gatos, a 143-bed acute care hospital in Los Gatos, Calif.; lease expires May 2009.
Irvine Regional Hospital and Medical Center, a 176-bed acute care hospital in Irvine, Calif.; lease expires February 2009.
Article By: American City Business Journal
Not included in article: Medical Asset Management is the exclusive development representative for a 2 acre site adjacent to Tarzana Regional Medical Center for a prospective 100,000 square foot medical office building.