Care New England turns down $550 million buyout offer from StoneBridge Healthcare

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Care New England turns down $550 million buyout offer from StoneBridge Healthcare

por John R. Fischer, Senior Reporter | December 11, 2020
Business Affairs
Care New England has declined StoneBridge's buyout offer of $550 million
Care New England has said no thanks to a $550 million buyout offer from Pennsylvania’s StoneBridge Healthcare.

The healthcare system, which is the second largest in Rhode Island, is instead focusing on ongoing talks for a merger with healthcare system Lifespan Corporation to create a unified system with Brown University, according to the Providence Journal.

“It’s abundantly clear that the best direction for Rhode Island’s healthcare future is the creation of a robust academic health system with the merger of Care New England and Lifespan, and a deep affiliation with Brown University,” said CNE president and CEO Dr. James Fanale in a statement.

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StoneBridge made the offer this week in a letter sent to the CNE board. The healthcare system offered to buy out CNE for $250 million and invest $300 million in capital improvements over six years. Employees' pension plans would also have been fully funded.

"We believe that StoneBridge Healthcare is in a strong position to help Care New England to continue delivering cutting-edge care to the communities it serves for years to come,” said Joshua Nemzoff, chief executive officer for StoneBridge Healthcare, in a statement.

Ray Sullivan, a spokesperson for the United Nurses and Allied Professionals union, which represents staff at both CNE and Stonebridge, opposes such a union. “Our experience with Prospect CharterCARE and others has taught us that out-of-state equity fund groups care more about enriching investors than Rhode Island patients and health workers. While we still have a number of serious concerns and questions about a Lifespan/Care New England merger, we believe that deal has potential and should continue to be thoroughly vetted.”

Talks of a merger between CNE and Lifespan began in September, with CNE agreeing to negotiate such an agreement only with Lifespan, reported the Providence Journal. This exclusivity agreement bars CNE and its executives from entering similar talks with other interested buyers.

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