Straub severingStraub Clinic & Hospital, led by its roughly 200 physicians, has paid $30 million to repurchase assets and shares from PhyCor Inc., which invested in Straub to become its business partner in 1996.
The Hawaii physicians are
paying $30 million to end their
partnership with the
By Russ Lynch
Straub also said yesterday that it has ended its management agreement with Tennessee-based PhyCor.
PhyCor had assumed some of Straub's debts, acquired some assets, and signed a 40-year contract to manage the facilities and provide capital, expertise and computer systems for the business side of Straub's operations. PhyCor also issued $7.7 million worth of its stock to the physicians, who continued to operate the medical side of the clinic.
In the 1996 merger, PhyCor of Hawaii was established to run the business side. Straub said yesterday it has bought all the outstanding shares of PhyCor of Hawaii.
The partnership and the PhyCor capital injection enabled Straub to expand and it has since opened six additional clinics.
Straub said the end of the relationship with PhyCor will not affect any of the services available at Straub Hospital or any of the 17 clinics on Oahu, Lanai and the Big Island.
PhyCor, which ran into financial difficulties two years ago, has been selling its interest in clinics across the country and said recently it hopes to be out of ownership in most or all of its 27 clinics.
PhyCor yesterday reported a third-quarter loss of $64 million, after a loss of $427 million in the second quarter. In both cases, most of the losses were from restructuring charges in connection with its moves to get out of clinic ownership.
PhyCor's shares, which were trading at about $28 at the time of the Straub deal in late 1996, closed down 1 cents today at 10 cents.
Straub's physicians said in June they were in the early stages of talks that could lead to severing the relationship with PhyCor.