Mercy Iowa City hospital is now under auction as a rival bid is competing with the University of Iowa health system, The Gazette reported Oct. 3.
The auction, which is scheduled for Oct. 4, comes after the University of Iowa health system told Becker's in August that it plans to acquire Mercy Iowa City after it filed for Chapter 11 bankruptcy in the Northern District of Iowa.
The University of Iowa health system said that if it received approval from the university board of regents, the state of Iowa and the bankruptcy court, it was planning to make Mercy Iowa City hospital a part of UI Health Care.
Now, competing bids have triggered an auction, according to the publication.
It is currently unknown how many bids Mercy Iowa has received, but according to The Gazette, the competing bid had to be at least $20.9 million, as the University of Iowa health system offered $20 million and competing bidders would owe a "breakup fee" of $800,000 for the hospital.
The winning bidder will own Mercy's assets, free of any of the hospital's current debt, which allows the bidder then to search for a new operator or to sell the assets.
According to the publication, the winning bidder would not have to maintain Mercy as a healthcare operation.