Porter Sale in Middle of Mammoth Buyout, by Christine Kraly, NWI [Gary IN], March 20, 2007

Porter Sale in Middle of Mammoth Buyout

By Christine Kraly
NWI [Gary IN]
March 20, 2007

http://www.thetimesonline.com/articles/2007/03/20/news/top_news/doc375d5a596a25b22a862572a40006868b.txt

Valparaiso — Questions are being raised about Porter hospital's sale, after the conglomerate in talks to buy Porter announced its own multibillion-dollar buyout Monday.

Community Health Systems of Franklin, Tenn., announced a $5.1 billion deal to buy Triad Hospitals, the for-profit health care company based in Plano, Texas, that's poised to purchase Porter.

Porter officials considered, but passed over Community -- smaller in revenue and bed capacity than Triad -- in favor of a partnership with Triad last December.

"We have every reason to believe we will complete the transfer of assets as planned," Dick Wathen, chairman of the Porter Board of Trustees, said in a statement.

The merger would create the country's largest publicly traded hospital company, with 130 hospitals owned or operated in 28 states, and a bed count of more than 18,700.

The merger trumps a previous deal Triad announced last month wherein it agreed to be taken private by affiliates of private-equity firm CCMP Capital Advisors and Goldman Sachs' GS Capital Partners.

Triad has terminated its earlier agreement with the private affiliates, according to a statement from Community.

"The transaction with CHS validates Triad's strategy, and I am proud of the value this brings to our shareholders," James Shelton, Triad chairman and chief executive officer, said in a statement. "We look forward to working to ensure a smooth transition for our communities."

What this means to the Porter community seems unclear.

The deal with Community requires regulatory and Triad stockholder approval, and is expected to close in the third quarter of 2007. Porter officials originally had hoped to finalize the hospital's sale to Triad by May 1.

Wathen said Porter and Triad would continue its negotiation to a conclusion, saying that Community now would have to approve the transaction.

"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."

Porter spokeswoman Robin Carlascio said CEO Ron Winger would not be returning calls Monday and referred questions back to the hospital's statement.

Pat Ball, Triad's vice president of marketing and public affairs, said she had no information on the impact the merger would have on Porter's sale, but that Triad and Porter officials had been in communication Monday morning.

Ball said Triad had no additional comments.

Calls to Community Chief Financial Officer W. Larry Cash were not returned.

The agreement has been unanimously supported by both the Community and Triad boards of directors.

Contact: ckraly@nwitimes.com or 219.762.1397, ext. 2225