In an unusual turn of events, the University of Iowa has won the auction for Mercy Iowa City, reversing an earlier result where Mercy’s chief creditor bought the financially imperiled hospital.
The UI’s original bid of $28 million was resubmitted and chosen as the best and highest option. At issue in the reversal was a disagreement between Mercy and the first-called winning bidder Preston Hollow, a private equity firm with $42 million already invested in the hospital. Using a combination of cash and some of the credit it already had in Mercy, the Texas-based investment firm bid and won on Oct. 10. But last week, Preston Hollow and Mercy disputed whether the purchase gave access to money held by Mercy’s foundation, reports Iowa Public Radio. Read more.
