Health Management Board Reviewing $7.6 Bln. Merger With Community Health

(RTTNews) - Hospital operator Health Management Associates Inc. (HMA), said Wednesday its newly constituted board is in the process of assessing its near $7.6 billion merger with larger rival Community Health Systems Inc. (CYH).

As part of the process, the board has retained independent financial advisors, Lazard Freres & Co. LLC and UBS Securities LLC, and legal counsel, Paul, Weiss, Rifkind, Wharton & Garrison LLP.

Health Management and Community Health also agreed to an amendment to the merger deal pursuant to which, among other things, Community Health consented to the engagement of Lazard and UBS as additional advisors.

Naples, Florida-based Health Management owns and manages hospitals and ambulatory surgery centers in small cities and some urban markets. In July, the company agreed to be acquired by Community Health for about $7.6 billion, including about $3.7 billion of debts. The deal is to close by the end of the first quarter of 2014.

On completion of the deal, Community Health would own or operate about 206 hospitals in 29 states with a total bed count of more than 31,000. Community Health expects the deal to have a neutral impact on its earnings per share in the first year upon the close of the merger and significantly accretive thereafter.

Meanwhile, last month, Health Management said its quarterly profit plunged, hurt by lower revenue and increased provision for doubtful accounts.

Shares of Health Management are trading at $12.72, down $0.10 or 0.74%, on a volume of 2.8 million shares on the NYSE.

Shares of Community Health are currently down $0.23 or 0.58%, at $39.15, on a volume of 676 thousand shares.