CHICAGO — Three weeks after the Federal Trade Commission sued Promedica Health System, arguing it violated antitrust rules, the Ohio-based hospital chain is keeping a $249 million new-money deal on hold.
Promedica had planned to price the debt on Jan. 13, a week after the FTC filed its complaints. But the day before the sale, the issuer opted to postpone the borrowing, which now remains on the day-to-day calendar.
Promedica officials declined to comment on whether the sale will go forward.
Barclays Capital is the senior manager and Wells Fargo Securities is the co-senior manager. Lucas County is the conduit issuer.
Nonprofit Promedica is northwest Ohio’s leading health provider. It acquired financially struggling St. Luke’s Hospital, located in Lucas County, on Aug. 31, 2010. The deal boosted to four the number of acute-care hospitals Promedica now operates in the county.
The system operates seven additional hospitals throughout the region.
The FTC’s Jan. 6 complaint alleges that the acquisition could significantly harm patients, employees, and local employers by allowing Promedica to raise prices.
The two parties met in court last week and negotiated an agreement whereby the FTC would drop a separate complaint requesting a temporary restraining order and Promedica would agree to stop taking any steps toward integrating St. Luke’s until a decision is made in U.S. district court on granting a preliminary injunction.
The preliminary injunction would prevent Promedica from taking over St. Luke’s and would appoint an independent monitor to review compliance.
A court date on the preliminary injunction is set for Feb. 10-11 in Palm Beach, Fla., where the U.S. District Court of Toledo judge who is hearing the case spends the winter, an FTC spokesman said.
Promedica has $312 million of outstanding debt.
Moody’s Investors Service rates the system Aa3 and Standard & Poor’s rates it AA-minus. Moody’s analysts generally consider the St. Luke’s acquisition a strength, saying it will enhance the system over the long term while perhaps pressuring operating margins in the short term due to St. Luke’s large operating losses.