Skip to main content
You are the owner of this article.
You have permission to edit this article.
Edit
State judge allows Novant's $5.3 billion deal for Wilmington hospital to proceed

State judge allows Novant's $5.3 billion deal for Wilmington hospital to proceed

{{featured_button_text}}
NewHanover

Novant Health Inc. is trying to buy New Hanover Regional Medical Center in Wilmington for a reporter $5.3 billion.

Novant Health Inc.'s $5.3 billion offer to purchase New Hanover Regional Medical Center is near completion after a state Superior Court judge denied last week a temporary restraining order request by an opposing advocacy group.

The ruling from Judge Phyllis Gorham clears the way for the hospital's board of trustees to vote Thursday and New Hanover Board of Commissioners to cast a final vote Oct. 5.

The commissioners voted 4-1 on July 13 to approve Novant's letter of intent. The vote followed a nearly two-hour presentation, punctuated at times by impassioned comments on the negotiation process that began in July 2019.

Novant’s letter of intent represented an asset purchase, including paying $1.5 billion at closing, $2.5 billion toward “strategic capital expenditures,” and $600 million to routine capital expenditures.

The letter of intent gave Novant an exclusive negotiating period that would end Oct. 31.

The grassroots advocacy group Save Our Hospital Inc. sought the injunction, in particular to gain access to additional public records on the negotiations.

The Wilmington Star-News reported that lawyers for the medical center and county said some records had been provided as allowed by law, but noted some had been delayed because of the size of the request. The officials said work would continue to provide the requested documents.

"We are pleased that Save Our Hospital’s motion has been denied by the court," commission chairwoman Julia Olson-Boseman said in a statement.

"This reinforces the county and hospital’s position that we have been transparent and open throughout this process — with Save Our Hospital, its representatives and the entire community.”

Save Our Hospital could not be reached for comment.

When the commissioners approved the letter of intent, group president Gene Merritt said it believed "county leaders have endorsed a flawed process with a predetermined outcome to sell our community hospital to the highest bidder."

“If not stopped, this deal will mean higher costs with no guarantees of better access or quality of care for our community,” Merritt said.

Novant declined to comment on the judge's ruling, deferring to the New Hanover hospital.

John Gizdic, president and chief executive of the New Hanover hospital, said in a statement that "we will continue to engage with our community and share information about all this partnership can do to improve the health of our region."

"We know that the large majority of our community now sees the tremendous benefits it will bring."

Deal details

Novant would acquire affiliated New Hanover Regional practices, clinics and facilities, certain properties and certain equity interests in subsidiaries and joint ventures.

It would agree to continuing services at current level, if not enhanced, for at least 10 years. It also would commit to assuming the system’s partnership with Pender Memorial Hospital.

Carl Armato, Novant’s president and chief executive, has said Novant and the Wilmington hospital “are natural partners with aligned values and not-for-profit charitable missions.”

“Maintaining and expanding medical education at (the hospital) will allow Novant Health to best serve the Wilmington community, while continuing to build the pipeline of physician talent for North Carolina,” Armato said.

The capital expenditure commitment was the biggest difference between Novant’s $2.5 billion offer and those made by finalists Atrium Health (just more than $1 billion) and Duke Health ($1.9 billion).

Novant is attempting to establish a third flagship hospital in North Carolina, in addition to hubs in the Triad and Charlotte. Novant already operates Brunswick Medical Center in the nearby town of Bolivia, where it opened a $100 million, 78-bed community hospital in July 2011.

Novant has agreed to form its first-ever medical-education partnership with UNC Health and its medical school. UNC Health already provides educational and clinical services to the New Hanover system, which is made up of 855 licensed beds at three hospital campuses.

Novant would commit to retain all New Hanover Regional employees at their current positions, title and salaries for a minimum of 24 months after closing. The local hospital board would have to approve any job cuts after the 24-month period.

Daily management decisions would remain based in Wilmington, according to Novant’s proposal.

336-727-7376

@rcraverWSJ

The business news you need

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Related to this story

Most Popular

Get up-to-the-minute news sent straight to your device.

Topics

Breaking News