Monday, May 21, 2018
Business

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

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]

Comments
FPL parent wants to expand its Florida footprint with new purchase

FPL parent wants to expand its Florida footprint with new purchase

TALLAHASSEE ó The parent company of Florida utility giant Florida Power & Light announced Monday that it will buy the largest electricity producer in Northwest Florida, Gulf Power, in a $6.4 billion deal.Juno Beach-based NextEra Energy Inc. said in a...
Updated: 2 hours ago
One of Ybor Cityís most historic blocks about to see construction of four-story boutique hotel

One of Ybor Cityís most historic blocks about to see construction of four-story boutique hotel

TAMPA ó Developers are poised to launch construction this week on one of Ybor Cityís biggest new projects in years ó a four-story, $50 million boutique hotel being created by a Chicago company that seeks out neighborhoods rich in color and character....
Updated: 4 hours ago
Shoppers begin Publix boycott as chain continues supporting Adam Putnam for governor

Shoppers begin Publix boycott as chain continues supporting Adam Putnam for governor

Publix has been Floridaís favorite grocery chain for decades ó but some shoppers are turning their backs on the store after learning it donated more than half a million dollars to gubernatorial candidate Adam Putnam. A handful of state advocacy group...
Updated: 7 hours ago
GasBuddy predicts plunge in summer travel, blames gas prices

GasBuddy predicts plunge in summer travel, blames gas prices

At least one gas price tracker expects rising fuel prices to sharply curtail summer travel. "For all those that have said summer travel will be unaffected by high gas prices, we offer thousands of respondents who have strongly indicated thatís not tr...
Updated: 7 hours ago
Barack and Michelle Obama are becoming television and film producers for Netflix

Barack and Michelle Obama are becoming television and film producers for Netflix

Netflix announced a production deal Monday with Barack and Michelle Obama that will see the former first couple create a wide range of content for the streaming service.The deal, talks for which had first been reported in March, will encompass a wide...
Updated: 11 hours ago
Starbucks: You donít have to buy coffee to sit in our cafes or use our restrooms

Starbucks: You donít have to buy coffee to sit in our cafes or use our restrooms

Starbucks is now allowing people to use its restrooms and sit in its cafes and patios even if they do not buy anything.The coffee giant on Saturday announced its new policy, which says that customers, including those who did not make a purchase, can ...
Published: 05/21/18

Hernando Business Digest for May 25

Business digestBrieflyHOSPITAL UPGRADES SURGICAL SYSTEM: Oak Hill Hospital recently acquired the latest da Vinci Xi Surgical System, which has broader capabilities than prior generations of the system. The new system is designed with the goal of furt...
Published: 05/21/18
Camping without the hassle: New service rents you all the gear you need, plus the car

Camping without the hassle: New service rents you all the gear you need, plus the car

One day in April, I returned from a camping trip - a quick 24 out of the city - and ran a load of laundry. Whatís more telling is what I didnít do.I didnít hose down a muddy tent, I didnít soak a shoddily cleaned pot, and I categorically did not empt...
Published: 05/19/18
Romano: Save your money, sports betting wonít be in Florida anytime soon

Romano: Save your money, sports betting wonít be in Florida anytime soon

It is the middle of the day and the beginning of the off-season at Tampa Bay Downs. That means the action is limited to simulcast wagering, and that means the televisions outnumber the bettors.The parimutuel industry is long past its heyday in Americ...
Published: 05/19/18
Son of Crabby Billís founder leaves complex legacy of troubled projects and good deeds

Son of Crabby Billís founder leaves complex legacy of troubled projects and good deeds

SOUTH PASADENA ó Like his father, who founded the Crabby Billís seafood restaurant chain, John Loder Sr. had a larger-than-life personality. That was one reason he dived into the real estate business, becoming a well-known, if at times controversial ...
Published: 05/18/18
Updated: 05/21/18