Dr. William K. Atkinson II
President and Chief Executive Officer
WakeMed Health & Hospitals
3000 New Bern Avenue
Raleigh, NC 27610
Dear Dr. Atkinson,
I write to follow up on my email of May 17 requesting further details of WakeMed' s intent to offer to acquire Rex Healthcare. Having carefully reviewed your letter in light of appropriate fiduciary responsibilities, the UNC Health Care Board of Directors has determined that it contains insufficient information to evaluate as a proposal. If WakeMed wishes the UNC Health Care System Board to respond to an offer, the Board would need to see evidence of your financial capability to execute this transaction. Specifically, the following items would need to be addressed:
- Definition of assets included in the transaction;
- Proposed closing date of the transaction;
- Participating parties in the transaction;
- Source of financing for the transaction, such as cash, bond debt, venture capital or other sources;
- The identity of a reputable investment banking firm assisting you with the transaction;
- Timing and form of consideration paid for the acquired assets;
- Commitments, if any, to the employees of Rex Healthcare, such as commitments regarding retention of employees and continuation of employment compensation, benefits and employment policies; and
- Commitment of funds to go into escrow to conduct due diligence.
There are several other topics that any offer must address, which would include the alignment of missions, visions and values between the organizations; an overview of WakeMed's strategic focus and direction, and evidence that the proposed acquisition would serve the community, including details of the ways WakeMed contends the cost of health care in Wake County and across the state would be lowered. Moreover, we would request more information about the governance, capital planning, evaluation of cultural fit, and other operational considerations inherent in a transaction of this complexity. In addition, we would need information from WakeMed on how it contends such a transaction would comply with Federal anti-trust laws. Finally, we would need information about the position Rex Healthcare would occupy in the WakeMed organization.
Since your original letter to me was delivered on May 12, 2011, I request that you respond with details of a proposal by June 17, 2011. If I receive no response by that date, I will assume the offer is not a serious one and will deem it withdrawn.
Thomas W. Ross
cc: Dr. Richard M. Krasno
Dr. William Roper
Mr. Tom Oxholm
Mr. Dale Jenkins
Mr. David Strong