PhyCor Inc., a medical management company, and Straub announced the planned deal this morning. Financial details were not disclosed.

Straub said the transaction is not expected to result in changes for its 2,000-plus employees or in the services the company offers.

"We're delighted with the proposal because PhyCor will provide access to capital for future Straub growth," said Dr. Blake Waterhouse, Straub's president.

Waterhouse had disclosed in February that PhyCor was in discussions with Straub about possible investment opportunities.

The planned merger, still subject to approval by Straub shareholders and regulators, was approved by the company's board last night. It is expected to close by the end of January.

As part of the planned merger:

Existing Straub stockholders will swap their privately held shares for PhyCor stock, which is publicly traded.

PhyCor will become a partner in the business operations of Straub and purchase certain assets and assume certain debts.

A new Straub corporation will be formed, owned entirely by Straub physicians. The physicians will continue to own Straub's land and buildings and have responsibility for medical policy and patient care.

Straub has 200 physicians and operates a 159-bed hospital on Oahu.

Waterhouse said PhyCor will have no interest in the medical side of the operation, but will provide expertise and state-of-the-art computer systems for the business side.

PhyCor said the definitive merger agreement includes management of a 40-physician clinic on Guam that is half owned by Straub.

Straub said it posted a profit of $5.5 million on revenue of $201 million last year. PhyCor, which operates 41 clinics with about 2,650 physicians in 23 states, reported a profit of $21.9 million on revenue of $441.6 million.

PhyCor shares, traded on the Nasdaq stock exchange, closed today at $38, up $2.50 from yesterday's close.