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Bondholder outbids U of Iowa for Mercy Iowa City

Bondholder Preston Hollow Community Capital has outbid the University of Iowa for Mercy Iowa City hospital in a surprise turn of events, according to an Oct. 10 The Gazette report.

UI Health had bid $20 million for the bankrupt hospital, but the Dallas-based bondholder, together with for-profit Glendale, Calif.-based American Healthcare Systems, now seems set to take over the hospital. A judge still has to finalize the sale of the hospital and its assets, Mercy Iowa City said in a release.

The new owners, if approved, have also pledged to invest "significant capital" in the hospital. Terms of the bid were not disclosed.

"We know Preston Hollow as a bondholder, and we have learned more about American Healthcare Systems," Mercy Iowa City President and CEO Tom Clancy, PhD, RN, said in a news release. "AHS is experienced at operating and rehabilitating hospitals across the country. As we celebrate our 150th anniversary here in Iowa City, it is comforting to know that they will continue to operate the hospital and our clinic network as a community-based health system."

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