Sept. 10, 2004 – Tenet Healthcare Corporation (NYSE: THC) announced today that a company subsidiary has entered into a definitive agreement to sell 225-bed Midway Hospital Medical Center in Los Angeles to Physicians of Midway, Inc.
Gross proceeds to Tenet from the sale of the hospital are expected to be approximately $10 million for property, plant and equipment. Net after-tax proceeds, including the liquidation of working capital, are estimated to be approximately $11 million. The company expects to use the proceeds of the sale for general corporate purposes.
Physicians of Midway, Inc. was formed by a group of community physicians most of whom have been leaders of the medical staff and have practiced at Midway Hospital Medical Center for nearly two decades. Physicians of Midway, Inc. intends to continue to operate the hospital as an acute care facility and maintain its emergency department. As part of the agreement, Physicians of Midway, Inc. has committed to offer employment to substantially all employees of the hospital. The transaction is expected to conclude following completion of normal regulatory requirements.
“We are pleased to have reached an agreement to sell this outstanding community hospital to Physicians of Midway, Inc., a well-qualified buyer that has been affiliated with the hospital for nearly two decades,” said W. Randolph Smith, president of Tenet’s former Western Division, who is overseeing the company’s previously announced divestiture program. “The announcement of this sale agreement once again affirms our commitment to seek buyers who will continue to operate the facilities we are divesting as acute care hospitals. At the same time, it’s important to note that California remains Tenet’s largest market and we are committed to serving the needs of our many, diverse communities through the staff and physicians of the hospitals and health care facilities that we are retaining in the state.”
Midway Hospital Medical Center, which has been part of Tenet since 1997, provides general acute services as well as specialty programs including the center for heartburn and esophageal disorders, bariatric surgery, subacute services and pulmonary rehabilitation.
Midway Hospital Medical Center is one of 27 facilities Tenet announced in late January that it was divesting – 19 in California, two in Louisiana, three in Massachusetts, two in Missouri and one in Texas.
In June, Tenet completed the sale of Brownsville Medical Center in Brownsville, Texas, to Valley Baptist Health System. Net after-tax proceeds, including the liquidation of working capital, are estimated to be approximately $68 million. In July, Tenet announced it had entered into a definitive agreement to sell four hospitals in the East Los Angeles area to AHMC Inc. Estimated net after-tax proceeds, including the liquidation of working capital, are expected to be approximately $95 million. That transaction is expected to be complete by Sept. 30. Also in July, Tenet returned 232-bed Doctors Medical Center – San Pablo in San Pablo, Calif., to the West Contra Costa Health Care District, the entity from which the company had been leasing the facility.
In August, Tenet announced it was transferring ownership of three West Los Angeles-area hospitals to Centinela Freeman HealthSystem, a new community-based health care delivery network in Los Angeles. In agreement with the new owner, terms of the transaction were not immediately disclosed. That transaction is expected to be complete by Oct. 31, subject to regulatory approvals. Also in August, Tenet completed the sale of Doctors Hospital of Jefferson in Metairie, La., to East Jefferson General Hospital. Net after-tax proceeds, including the liquidation of working capital, are expected to be approximately $33 million.
Negotiations with potential buyers for the remaining 16 hospitals are ongoing.
Tenet Healthcare Corporation, through its subsidiaries, owns and operates acute care hospitals and related health care services. Tenet’s hospitals aim to provide the best possible care to every patient who comes through their doors, with a clear focus on quality and service. Tenet can be found on the World Wide Web at www.tenethealth.com.
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Some of the statements in this release may constitute forward-looking statements. Such statements are based on our current expectations and could be affected by numerous factors and are subject to various risks and uncertainties discussed in our filings with the Securities and Exchange Commission, including our annual report on Form 10-K for the fiscal year ended Dec. 31, 2003, our quarterly reports on Form 10-Q and periodic reports on Form 8-K. Do not rely on any forward-looking statement, as we cannot predict or control many of the factors that ultimately may affect our ability to achieve the results estimated. We make no promise to update any forward-looking statement, whether as a result of changes in underlying factors, new information, future events or otherwise.