HUDSON COUNTY – In a letter sent to Christ Hospital CEO Peter Kelly, Hudson Hospital Holdco LLC has asked for an opportunity to make a bid to purchase the struggling Jersey City medical facility. Hudson Hospital Holdco already owns Bayonne Medical Center and earlier this year bought Hoboken University Medical Center.
For the last several months, Christ’s Board of Directors has been negotiating a deal to sell the hospital to Prime Healthcare Services, a California-based company that owns a chain of 14 for-profit hospitals in that state. If approved by New Jersey’s recently appointed Attorney General Jeff Chiesa and the New Jersey Department of Health and Senior Services, Christ would become Prime’s first acquisition outside of California and could save the hospital, which loses $800,000 a month, from closing.
But concerns about Prime’s track record in California have led health advocates and officials in New Jersey to press Christ Hospital’s board to consider purchase bids from other potential buyers. LibertyHealth System, which owns Jersey City Medical Center, has already expressed an interest in purchasing Christ Hospital.
Now, apparently, Hudson Hospital Holdco wants to be considered as well. The company is offering a $10 million stabilization loan to Christ to give its board time to accept bids from other potential buyers.
In an eight-page letter of intent dated Dec. 23, an attorney for Hudson Hospital Holdco stated: “We understand from news reports that Prime Healthcare Services is a potential partner for Christ Hospital. We were not aware that Christ Hospital was holding an RFP process or a sale process, and had we been so advised, we would have proffered a competitive proposal for your consideration at the time you began discussions with Prime Healthcare Services. We would like to provide another option to ensure the most value for the hospital, the community, and the creditors as part of a transaction. Irrespective of your view of the purchase proposal about to follow, the buyer is willing to immediately fund a $10 million ‘debtor-in-possession’ loan with appropriate collateral and at market rates. We believe this loan will allow the Hospital to remain open for at least 6 to 10 months, [and] allows yourself and the Board of the Hospital to achieve the best value for the Hospital, the Community, and the Creditors, and removes the need for the state of New Jersey to provide any additional stabilization financing during the next 6 to 10 months.”
According to Spencer Baretz, a spokesman of Hudson Hospital Holdco LLC, this “emergency financing” will “provide a necessary lifeline to help keep the hospital open and allow the Board to run an orderly sale process with the participation of multiple bidders. By removing the risk of a cash crunch, this will allow the board to achieve an outcome which is in the best interest of the hospital, the community, the physicians, the employees, and the creditors.”
Prime Healthcare has already offered $15.7 million to purchase Christ Hospital, according to documents submitted to the Office of the New Jersey Attorney General. – E. Assata Wright