Sales agreement close for West Penn, Highmark
West Penn Allegheny Health System and Highmark are close to reaching a definitive agreement regarding the health insurer’s proposed acquisition of the Pittsburgh-based health system. A West Penn Allegheny spokesman said a definitive agreement should be reached soon, but declined to provide additional information about the time frame. Highmark, also based in Pittsburgh, announced plans to acquire West Penn in June (July 4, p. 6). As part of the deal, Highmark said it would provide the five-hospital system with a $50 million grant and $75 million education grant, and would invest an additional $350 million over the next four years. At the time, the parties said they expected to submit a regulatory filing to the Pennsylvania Insurance Department within two months. It has not yet been filed. UMB Financial Corp. said in a public statement dated Oct. 20 that requests from the master trustee for information about the deal have been denied by West Penn Allegheny and there have been no public notices about when the agreement will be signed or why the process has been extended. “Consequently, while the Master Trustee believes that discussions are on going, there is no assurance that such is the case,” according to the document. West Penn Allegheny asked for $9.7 million in September from the bond trustee for expenses incurred during the previous nine months. UMB said its subsequent requests for information about the requisition have not been answered. West Penn Allegheny is gathering details to respond to UMB, according to the spokesman.
Highmark would provide West Penn, above, with grants and investments.