Make us your home page

After sale to HMA, Bayfront finds its new parent may be acquisition target

Bayfront Medical Center agreed to be acquired by a national hospital chain that may itself be bought.

MELISSA LYTTLE | Times (2011)

Bayfront Medical Center agreed to be acquired by a national hospital chain that may itself be bought.

It made sense at the time.

St. Petersburg's Bayfront Medical Center agreed to be acquired this spring by a publicly traded hospital chain. The belief was that an independent hospital was more secure during such chaotic times in health care if it was backed by the nation's third-largest for-profit hospital company.

Careful what you wish for.

Naples-based Health Management Association, a chain of 70-plus hospitals that acquired Bayfront in April, now finds itself the target of growing rumors that it may be bought. Nothing is official. But after purchasing a majority stake in Bayfront, HMA adopted a legal strategy called a "poison pill" to discourage a hostile takeover. Its CEO recently announced he will step down next month. And the company is fending off its largest investor, a hedge fund, that wants to dump HMA's board of directors in favor of a new board more to the investor's liking.

Bayfront bargained for none of this financial stress. Avoiding such uncertainty, in fact, is exactly why Bayfront's leadership thought it best to sell itself in the first place.

So what happens to Bayfront's carefully crafted sale if HMA is acquired? The original deal included the spinning off of a new charitable organization called Bayfront HERO (Bayfront Health Education & Research Organization) to protect and advance Bayfront's legacy of community service in St. Petersburg.

Bayfront did not respond to a request for comment about HMA. But in a recent interview, new Bayfront CEO Kathryn Gillette indicated her plate was full just running the St. Petersburg hospital and expanding a new "Bayfront Health" brand to other HMA hospitals.

Here's what we do know about HMA's status.

Hedge fund investor Glenview Capital Management, HMA's largest investor with a 15 percent stake, proposed ousting the company's board and management after criticizing its leadership's "substandard strategic and financial approach."

"There is significant room for improvement at HMA," Glenview stated. The hospital company completed a "lost decade" in 2012, the hedge fund said, returning less than 1 percent to investors annually during the prior 10 years.

Tough talk. But Glenview insists it is not an aggressor.

"Our culture at Glenview is to analyze the facts in front of us, and to try to remove emotion or bias from the equation," the hedge fund stated. "In Hollywood terms, we are more Mr. Spock than William Wallace. We were not born to lead fights, but we are simply programmed to follow the logic trail and act accordingly."

HMA, in turn, has hired Morgan Stanley and Weil, Gotshal & Manges LLP to review its "strategic alternatives" while also hunting for a successor to outgoing CEO Gary Newsome. And the company on Friday issued a statement basically asking investors to ignore the hedge fund because HMA already was reviewing its future options.

Who might buy HMA? Rumors so far focus on Tennessee-based Community Health Systems Inc. as a likely candidate. Analysts value such a deal, if it were to happen, at close to $9 billion.

Hospital deal speculation is rife in the wake of Tenet Healthcare Corp.'s $1.73 billion agreement to acquire Vanguard Health Systems Inc. It's part of a consolidation trend expected to grow with the arrival of the new health care law and a national increase of patients who will have coverage.

Until HMA's future gains some clarity, Bayfront may be in for a bumpy ride.

Robert Trigaux can be reached at [email protected]

Bayfront brand expanding

Under a new Bayfront Health name, Naples-based Health Management Associates is branding a half dozen of its Tampa Bay and Gulf Coast hospitals. The regional branding makes St. Petersburg Bayfront Hospital the lead medical facility for renamed HMA hospitals from Hernando County south to Charlotte County.

Name changePrevious name
Bayfront Health St. PetersburgBayfront Medical Center
Bayfront Health BrooksvilleBrooksville Regional Hospital
Bayfront Health Dade CityPasco Regional Medical Center
Bayfront Health Spring HillSpring Hill Regional Hospital
Bayfront Health Port CharlottePeace River Regional

Medical Center
Bayfront Health Punta GordaCharlotte Regional

Medical Center

Venice Regional Medical Center will keep its current name.

After sale to HMA, Bayfront finds its new parent may be acquisition target 06/28/13 [Last modified: Monday, July 1, 2013 11:59pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. No toll lanes north of downtown Tampa in three of four interstate proposals


    TAMPA — Express lanes may not be coming to downtown Tampa after all. Or at least not to the stretch of Interstate 275 that goes north through Bearss Avenue.

    Seminole Heights resident Kimberly Overman discusses the new interstate options with V.M. Ybor resident Chris Vela (left), Hillsborough County Commissioner Pat Kemp and HNTB consultant Chloe Coney during a Tampa Bay Express meeting Monday night at the Barrymore Hotel. [CAITLIN JOHNSTON  |  Times]
  2. Pinellas commission set to discuss next budget, licensing board

    Local Government

    CLEARWATER –– The Pinellas County Commission will be busy on Tuesday.

  3. Pinellas grants St. Pete's request to add millions to pier budget

    Local Government

    Times Staff Writer

    The Pinellas County Commission has granted St. Petersburg Mayor Rick Kriseman's request to dedicate millions more toward the city's new pier.

    The St. Petersburg City Council on Thursday  voted 7-1 to appropriate $17.6 million for the over-water portion of the Pier District. This is a rendering of what the new Pier District could look like. [Courtesy of St. Petersburg]
  4. Pinellas licensing board loses support for staying independent

    Local Government

    CLEARWATER –– The Pinellas County Construction Licensing Board on Monday lost its strongest supporter for staying independent.

    State Sen. Jack Latvala, a Clearwater Republican running for governor, said Monday that he will no longer support any legislation to keep the Pinellas County Construction Licensing Board independent. This photo was taken in August. [SCOTT KEELER | Tampa Bay Times]
  5. Triad Retail Media names Sherry Smith as CEO


    ST. PETERSBURG — Triad Retail Media, a St. Petersburg-based digital ads company, said CEO Roger Berdusco is "leaving the company to pursue new opportunities" and a member of the executive team, Sherry Smith, is taking over.

    Sherry Smith is taking over as CEO at Triad Retail Media, the company announced Monday. | [Courtesy of Triad Retail Media]