Newspaper article The Florida Times Union

Hospital Merger Called off Financing Sinks Methodist-University Deal

Newspaper article The Florida Times Union

Hospital Merger Called off Financing Sinks Methodist-University Deal

Article excerpt

Methodist Medical Center and University Medical Center will not be merging to form Shands Jacksonville.

Citing difficulties in financing, Methodist Medical Center announced yesterday that it broke off its affiliation with University and Gainesville-based Shands HealthCare.

University officials found out about the failed merger yesterday. They said they will continue negotiations with Shands despite Methodist's decision.

The fallout occurred after Methodist bondholders and University creditors could not come to an agreement, said Methodist spokeswoman Joy Batteh-Freiha, adding she could not comment further.

The Methodist board made its decision Thursday afternoon. Batteh-Freiha said the hospital will continue to operate as an independent, not-for-profit medical center.

Tom Donovan, chairman of Methodist's board of directors, did not return phone calls.

Mike Weinstein, executive director of the Jacksonville Economic Development Council, said he was surprised and "baffled" by Methodist's decision.

"My first reaction is it's probably a mistake and ultimately they'll realize that," he said. "The hospital industry is consolidating and shrinking for a reason and the two institutions on the Northside need to do the same. Recent financial history illustrates that Methodist can't go it alone."

Batteh-Freiha said both University and Methodist were in negotiations as late as Thursday, but in the end, could not reach an agreement.

"We were trying to negotiate a position that is favorable for all parties but it didn't work out. We very much wanted this to work out," she said. "We're going to pick up the pieces and move on."

Weinstein said he wasn't expecting this move since he had reports that the merger was nearing completion.

In January, Shands officials were able to renegotiate Methodist's $80 million debt, a process that took longer then expected because Methodist's 2,800 anonymous bondholders originally refused to identify themselves. …

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