Pittsburgh-based West Penn Allegheny Health System has canceled its $475 million merger with insurer Highmark, claiming the payor breached the affiliation agreement, according to a Pittsburgh Post-Gazette report.
Highmark allegedly wanted to restructure the health system through bankruptcy, which violated the companies' affiliation agreement. After West Penn entered bankruptcy, Highmark would allegedly measure the market's reaction to determine whether to proceed with the acquisition, according to West Penn.
The chairman of West Penn's board, Jack Isherwood, said bankruptcy "is not the first option, it's the last option," according to the report. He also said West Penn's proposed alternatives to bankruptcy were met with "tepid" interest, according to the report.
The system is now looking for new partners and is willing to consider all types of suitors, whether for-profit and non-profit health systems or insurance companies.
Highmark released a statement saying there was not a breach in the affiliation agreement. The payor says continuing the acquisition is in the best interest of both companies. Highmark CEO William Winkenwerder Jr. was alerted of West Penn's decision to pull the plug on the merger earlier this morning.
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Highmark allegedly wanted to restructure the health system through bankruptcy, which violated the companies' affiliation agreement. After West Penn entered bankruptcy, Highmark would allegedly measure the market's reaction to determine whether to proceed with the acquisition, according to West Penn.
The chairman of West Penn's board, Jack Isherwood, said bankruptcy "is not the first option, it's the last option," according to the report. He also said West Penn's proposed alternatives to bankruptcy were met with "tepid" interest, according to the report.
The system is now looking for new partners and is willing to consider all types of suitors, whether for-profit and non-profit health systems or insurance companies.
Highmark released a statement saying there was not a breach in the affiliation agreement. The payor says continuing the acquisition is in the best interest of both companies. Highmark CEO William Winkenwerder Jr. was alerted of West Penn's decision to pull the plug on the merger earlier this morning.
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