A Medical Device Daily

Manor Care, (Charleston, West Virginia) filed a motion with the West Virginia Heath Care Authority (WVHCA; Parkersburg, West Virginia) to dissolve the stay issued to the Authority's previous decision to approve a certificate of need (CON) application regarding the sale of Manor Care to the Carlyle Group. The motion also requests that the WVHCA issue an immediate decision in the matter. According to the company the stay costs roughly $1 million a day.

Manor Care first met with its board on Oct. 17, 2007, to vote on the proposed acquisition of it by the Carlyle Group. Under the agreement, the Carlyle Group would take the company private in an all-cash transaction of about $6.3 billion.

Manor Care shareholders would then receive $67 in cash for each share of common stock owned, a 20% premium to Manor Care's closing stock price of $55.75 on April 10, prior to the company's April 11 report that it was evaluating alternatives.

But on Dec. 14, the WVHCA held a reconsideration hearing of its previous decision to approve the CON after District 1199 of the Health Care and Social Services Union and the Service Employees International Union (SEIU) requested reconsideration. Manor Care said it was clear from the day's proceedings that there was no evidence to support SEIU's request for reconsideration.

"We have been and continue to be committed to providing the highest quality of care to our patients in West Virginia — and across the country — and we are confident this transaction will only strengthen our efforts in that area. Quick approval from West Virginia is essential," said Stephen Guillard, executive VP and COO of Manor Care. "Based on the failure of SEIU to raise any legitimate legal issues during the six-hour hearing on Friday, we believe there are no grounds to maintain the stay. We are filing a motion for an immediate lift of the stay and respectfully requesting that the Health Care Authority issue an immediate decision on the transaction."

The WVHCA approved Manor Care's CON application on Oct. 19, and found that Manor Care had satisfied all of the requirements set forth in the CON application. Neither District 1199 nor the SEIU chose to participate in the proceedings surrounding that CON application. On Nov. 16, nearly the last day before the deadline for requesting reconsiderations, District 1199 requested a stay and reconsideration of the decision. The WVHCA granted the motion to reconsider on Nov. 20, setting Dec. 14 as the reconsideration hearing date.

As of the latest posting of the West Virginia Investment Management Board, which manages state pension plans, the fund holds about 161,000 shares of Manor Care stock. Each day this transaction is delayed results in a monetary loss of about $1 million for Manor Care shareholders nationwide, including West Virginia pension holders.

"We respectfully request that the Health Care Authority lift the stay and approve our transaction immediately so that we can focus on our core mission — bringing quality care to our patients in West Virginia," continued Guillard.

Manor Care, through its operating group HCR Manor Care, is a provider of short-term post-acute services and long-term care.