news-record.com

RALEIGH (MCT) -- WakeMed officials plan to announce today that they're making a $750 million bid to buy cross-Raleigh rival hospital Rex Healthcare.

WakeMed executives have accused Rex and its Chapel Hill-based parent, UNC Health Care System, of using "predatory" efforts to compete in the fast-growing Wake County medical market.

By initiating a hostile takeover offer, WakeMed hopes to convince state lawmakers that selling Rex would provide UNC Health, and the state, with cash to help alleviate the budget crunch.

But Rex and UNC Health officials said Wednesday night that they have no interest in a deal with WakeMed. UNC Health, part of the state-owned UNC system, bought Rex in 2000 for $290 million, which included its debt.

"Rex is not for sale," UNC Health CEO Bill Roper said in a telephone interview. "It's an institution that's a very important part of our mission to serve the entire state."

Rex CEO David Strong sent an email to Rex employees late Wednesday dismissing rumors of a potential sale as "outrageous and untrue."

WakeMed officials are expected to deliver a letter to UNC president Tom Ross today with an official offer.WakeMed CEO Bill Atkinson has discussed a possible deal with state lawmakers.

"We feel strongly that this proposal is in the best interest of the communities we serve and the state," Atkinson said in a statement. "We look forward to speaking with president Ross and other university officials in the next few days."

Atkinson could not be reached for further comment.

The $19.3 billion budget recently passed by the House would eliminate an annual subsidy for UNC Health, and lawmakers are eager for new sources of revenue to bolster the state's fiscal health.

Such a deal would dramatically reshape the Triangle's health-care market but would face many hurdles. Across the country, federal health reform and other factors are spurring consolidation, as medical providers seek safety in larger health systems.

WakeMed will argue that buying Rex wouldn't create any antitrust issues because of strong competition in the Triangle's medical market from UNC Health and the Duke University Health System.

The buyout offer is partly an attempt by WakeMed to defend itself against UNC Health's expansion strategy. WakeMed officials are worried that UNC Health's efforts to capture more of the market for heart services, in particular, will hurt its core business.