Moody's also notes that the merger "strengthens Tenet's ability to make acquisitions of NFP hospitals. Such acquisitions are typically credit positive for target hospitals, particularly distressed institutions, as the acquisition typically results in 100% redemption of the target's outstanding bonds."
Wexler says the Tenet/Vanguard merger might prompt smaller, stand-alone hospitals to consider some sort of alignment, "whether it is clinical alignment or strategic alignment around certain services, or just looking for the protection of a deeper pocket."
"Each market is different and will somewhat dictate what is needed but it is more and more challenging," she says. "Reimbursements are declining. Volumes are declining. To the extent that these are not really high-acuity hospitals to begin with they are going to be more challenged to keep the volumes, the heads on the beds, which is not the game anymore. Having an effective competitor in the market with deeper pockets and a greater expanse, taking that leveraging power of the two for-profit companies and having them come together, just makes these for-profits more effective competitors in these marketplaces where these independents are already feeling pressures and challenges."
HMA Fixes July 18 as Record Date for Shareholders in Glenview Vote
Health Management Associates, Inc. has fixed July 18 as the record date for Glenview Capital Management's consent solicitation, which gives shareholders of record on that date the chance to choose whether to replace sitting HMA directors with the nine nominees put forward by Glenview.
Glenview, which owns 14.6% of HMA common stock, issued a notice to shareholders that any shares on loan on July 18 will not be eligible to consent.