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Highmark Launches West Penn Debt Offer as Deal's April Deadline Looms

The affiliation agreement between Pittsburgh-based health insurer Highmark and West Penn Allegheny Health System is set to expire April 30 — as is a tentative agreement between the parties and West Penn debt holders — but the state insurance department has not established a timetable for its decision on the merger, according to a Pittsburgh Post-Gazette report.

The April 30 end-date has been in place since Highmark's acquisition of West Penn was first proposed in spring 2011. A Highmark spokesperson said the payor has completed all of the Pennsylvania Insurance Department's requests for information, but a spokesperson for the department said officials are still waiting on consultants to complete a review of the deal, according to the report.

However, Highmark is still moving toward the looming deadline: Last week, the payor announced its offer to purchase West Penn's debt at 87.5 cents on the dollar.

This tender offer, which will expire April 26, is a necessary step for Highmark to close its proposed debt buyout agreement by April 30. Under that agreement, which was struck in mid-January, Highmark will buy up to $710 million of West Penn debt at the discounted rate while West Penn bondholders will absorb the losses.

More Articles on Highmark and West Penn Allegheny Health System:

Highmark Projects Profits for West Penn Allegheny in 2014
Jefferson Regional Officially Joins Highmark's System
Highmark's Affiliations With West Penn, Jefferson Regional Receive County Approval

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