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Potential buyers show interest in Valley hospitals

WARREN — Steward Health Care has received interest from a number of potential buyers for some or all of the bankrupt health care provider’s assets in Ohio and Pennsylvania, according to a document in the Dallas-based company’s Chapter 11 case.

Tuesday’s filing by the director of investment banking firm Cain Brothers — the company hired by Steward Health to market and sell some of its hospitals — states 71 parties were contacted with marketing materials in late January to “gauge potential interest in purchasing” Steward Health’s assets in the two states.

Thirty-four of them signed nondisclosure agreements and “received access to diligence materials,” according to the filing, which also states Cain Brothers has received indications of interest “from a number of buyers for some or all” of Steward Health’s assets “located in the combined Ohio and Pennsylvania region.”

Steward Health operates Trumbull Regional Medical Center in Warren, Hillside Rehabilitation Hospital in Howland and Sharon Regional Medical Center in downtown Sharon, Pa. It does not operate any other hospital in either state.

Cain Brothers is a division of KeyBanc Capital Markets Inc., a wholly-owned broker / dealer of KeyCorp and an affiliate of KeyBank National Association. The company was brought on in January by Steward Health to market and sell the Steward Health facilities in Ohio and Pennsylvania, as well as five hospitals in Texas, four in Arizona, three in southern Massachusetts and one each in Arkansas and Louisiana, according to the filing.

Steward Health also hired Leerink Partners, another investment banking company, to market and sell four Steward Health hospitals in northern Massachusetts and eight hospitals in Florida, according to another filing Tuesday.

The filings were made in support of a May 15 motion by Steward Health that proposes bidding procedures and a timeline.

The motion seeks a June 24 bid deadline for hospitals it operates in Ohio, Pennsylvania and five other states, with an auction proposed for June 27. A sale hearing would be July 2.

It is proposing a July 26 bid deadline for its hospitals in Florida, an auction date of July 20 with a sale hearing proposed for Aug. 5. Those dates also would be for the system’s other assets, according to the filing.

The company started the Chapter 11 process May 6 in a Houston bankruptcy court, listing billions in debt. Operating 31 hospitals in eight states, it is the largest physician-owned for-profit health care network in the U.S.

The May 15 document also states the company has a letter of intent and is in “advanced discussions” with Collaborative Care Holdings, LLC, an affiliate or UnitedHealth Group, to act as the stalking horse purchaser for Stewardship Health, the company’s nationwide physician network.

Steward Health hopes to announce a stalking horse agreement with UnitedHealth “in the near-term” that “will provide for a floor value and maximize the value” of Stewardship Health’s assets, the filing states.

The filing also states other buyers are interested in bidding on Stewardship Health’s assets.

A stalking horse bid, or agreement, is the initial bid for a company’s assets. The stalking horse bidder sets the low end of the purchase price.

Have an interesting story? Contact Business Editor Ron Selak Jr. by email at rselak@tribtoday.com. Follow us on X, formerly Twitter, @TribToday.

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