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Biotech / Medical : PHP Healthcare
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To: Jim Mac who wrote (117)11/15/1998 12:25:00 PM
From: Les White  Read Replies (1) of 136
 
Turnaround in process

This isn't a bankruptcy story, it's going to be a turn around or buy out story.

The HIP of New Jersey is going to be serviced by someone. It will either be a renegotiated contract with PHE, a renegotiated contract with the new owners of PHE, or the winner of a bid process for the contract.

The State doesn't have time for a new bid process. HIP is in trouble and it needs immediate attention. They have only 2 good alternatives. Work out an acceptable agreement with PHE or work with a new buy out party or partner.

Either way, a renegotiated contract is worth much more than the $11 mil valuation of PPH. That makes PHP a very attractive buy right now. A qualified PPM could come in and scoop up the contract plus all the infrastructure, and progress PPH has made toward making HIPNJ profitable.

I'd be surprised if Ambulatory were the only one interesting in picking up this big chunk of business cheap. The State, Nations Bank, and HIP all have an interest in resurrecting this dog. There would just be too much delay and compounding of the mess if PHP were allowed to go down.

There is a financial restructuring of HIP and PHE taking place. I don't pretend to know exactly how it's going to work out but I've bet my money that it's worth a hell of a lot more than $11 mil.

Les
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