The Mercury News reports that the owners of the Seton Coastside hospital have chosen their latest partner:
The selection of BlueMountain Capital Management comes four months after Daughters’ first suitor, Prime Healthcare Services, abandoned the Catholic hospital system at the altar, blaming “burdensome conditions” imposed by California Attorney General Kamala Harris on its $843 million proposed deal.
Daughters owns O’Connor Hospital in San Jose, Saint Louise Regional Hospital in Gilroy, Seton Medical Center in Daly City and Seton Coastside Hospital in Moss Beach, as well as two hospitals in Los Angeles.
Under terms of the new deal, the Manhattan-based BlueMountain – not to be confused with Blue Wolf Capital Partners, the Manhattan-based private equity fund that has now twice failed to woo Daughters – will initially infuse $250 million into the hospital chain. The hedge fund will continue to operate Daughters as a nonprofit, with an option to buy the chain after three years. The chain would then morph into a for-profit company.
Daughters said it will transfer control of the hospitals to an independent board of directors that will oversee the company that BlueMountain has started to manage the chain. BlueMountain also will honor current union contracts.