A month before Porter hospital was expected to complete a sale of its assets to Triad Hospitals Inc., another hospital company -- and bidder for Porter -- announced it will buy Triad.
Community Health Systems of Brentwood, Tenn., has agreed to buy Triad for about $5.1 billion, topping a previous bid by private-equity buyers.
Porter hospital board Chairman Dick Wathen said Monday he expects the sale of Porter's assets to be completed as planned. Porter and Triad, based in Plano, Texas, have completed a draft sale agreement that was expected to go before the Porter hospital board, the Porter County Board of Commissioners and the Porter County Council next month after a 10-day period during which the public would be able to view the agreement.
Triad agreed to pay what likely was to be more than $80 million for Porter hospital, along with agreeing to build a campus to replace the aging Valparaiso facility.
Wathen said Porter hospital and Triad will continue to move forward with the draft agreement, adding that Community Health System now also would have to approve the transaction.
Community Health System was one of three finalists the Porter board considered last year as a potential buyer, along with Triad and Clarian Health Partners of Indianapolis.
On Dec. 4, the Porter hospital board voted to negotiate exclusively with Triad.
"Community presented a strong proposal and was a serious contender," Wathen said. "They, too, bring national health care expertise that will benefit the citizens of Porter County."
Triad has 53 hospitals, including the Lutheran Health Network in northern Indiana, and another under construction.
Triad had previously agreed to be taken private for $50.25 per share, or $4.7 billion, by a buyout group that included an affiliate of Goldman Sachs and a JPMorgan Chase & Co. spinoff. It said it will cancel that deal as a result of the new offer.
"We knew that Friday was the deadline for submitting other offers," Wathen said, "but we did not learn until (Monday) morning that Community had submitted an offer that was accepted." Triad signaled last fall that a sale was likely. The stock had slumped since mid-2005 and its largest shareholder, hedge fund TPG-Axon Capital Management LP, had accused Triad of "remarkably poor financial analysis" and failing to say how it would fix the company.
Triad said it paid a breakup fee to cancel its earlier deal with GS Capital Partners and CCMP Capital Advisors but didn't disclose the amount. If Triad was negotiating with Community by Friday, the fee could be up to $40 million; otherwise, it could be $120 million, according to a Triad regulatory filing.
Triad's board recommended that shareholders take the CHS offer. Two inside directors abstained. If approved by Triad shareholders and regulators, the deal is expected to close in the third quarter.
Community Health Systems said the deal would make it the nation's largest publicly traded hospital company.
It would own or operate about 130 hospitals in 28 states and control more than 18,700 beds.
The Associated Press contributed to this report