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Prospect Medical Holdings tries to block sale of 384-bed bankrupt California hospital

Los Angeles-based Prospect Medical Holdings is making a last-minute attempt to block Prime Healthcare Services from buying a 384-bed bankrupt hospital in Lynwood, Calif., according to The Wall Street Journal.

Prospect Medical, which is backed by a private equity firm, is offering to pay $50 million more than Prime Healthcare's bid of $350 million for St. Francis Medical Center, according to people familiar with the matter who spoke to the Journal. 

Ontario, Calif.-based Prime Healthcare won a bid in bankruptcy court in April to acquire St. Francis from bankrupt Verity Health System in El Segundo, Calif. Prime Healthcare was the only bidder. 

The state's attorney general, Xavier Becerra, conditionally approved the sale of the safety-net hospital to Prime in July. 

But Prospect Medical is lobbying Verity Health and the attorney general to prevent the sale and reopen bidding. 

Prospect Medical said it didn't have a meaningful opportunity to participate in the sale due to the COVID-19 pandemic, according to the report.

In response to the challenge from Prospect Medical, a Prime Healthcare spokesperson told the Journal, "Prime's offer was determined to be the best and only qualified bid," adding that "Prime Healthcare has already started investments of $47 million at St. Francis that will enhance patient care."

More articles on healthcare industry transactions: 
Banner Health inks $200M deal to acquire Wyoming hospital
For-profit hospital divestitures: 6 latest deals involving CHS, HCA and Quorum
619-bed California hospital to join Cedars-Sinai

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