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June 21, 2011

Hospital sale talks pushed back

Choosing from among four hospital companies seeking to acquire Northeast Health System is taking longer than expected.

And the target date for a decision has been pushed back from the end of June to September, Northeast said Tuesday.

"This is a significant undertaking; one requiring careful and thoughtful analysis," Northeast President and CEO Ken Hanover said in a email. "There is a tremendous amount of information to consider, and review of this information and the ensuing discussions are requiring more time. Therefore, we expect the review process to continue through the summer and a decision to be reached by September."

Hanover has previously said investment capital for "information, clinical and medical technology" had convinced the trustees to find a merger partner. In early May, he pushed the first due date for a decision from the end of May to late June.

The suitors, however, have not changed, according to Northeast.

They include two nonprofits — Beth Israel Deaconess, a Boston-based teaching hospital system with a global profile, and the smaller, Burlington-based but equally prestigious Lahey Clinic.

Each has clinical links to Northeast, which is the financially healthiest system in Massachusetts to seek a larger partner for an acquisition-merger in the current wave of consolidations.

There are also two for-profit hospital systems in the mix — Massachusetts-based Steward Health System, and Nashville-based Vanguard Health Care.

Steward was formed by Cerberus Capital Management last year to acquire the six Caritas hospitals from the Archdiocese of Boston for $895 million. In the acquisition, Cerberus put the corporate leadership of the aged but highly respected Catholic hospitals in charge of the chain as it experienced investment from the equity investing parent company.

Since then, Steward has continued to expand its network, acquiring Merrimack Valley Hospital in Haverhill, and Nashoba Valley Hospital in Ayer. It is in the process of adding Landmark Medical Center in Woonsocket, R.I.

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