Sharp Pulls Out of Joint Venture Plan

Sharp Healthcare, the highly regarded nonprofit San Diego hospital chain that became a subject of a state investigation for its proposed joint venture with Columbia/HCA Healthcare Corp., on Friday withdrew from the planned agreement.

No details about the withdrawal decision were given. But Columbia/HCA--the nation’s largest for-profit hospital operator--said in a statement that Sharp’s board terminated discussions regarding the proposal, indicating that issues related to the state attorney general’s probe “created differences of opinion with respect to completion of the transaction.”

“We’re disappointed,” said Jeffrey Prescott, a spokesman for Columbia/HCA. “If there are other opportunities in the future, we’ll certainly take a look at them.”

Columbia/HCA entered into the joint-venture agreement with Sharp in December 1995, agreeing to take a 50% stake in Sharp’s four acute-care hospitals in San Diego for about $200 million.

Atty. Gen. Dan Lungren had vowed to block the proposed venture, which he said would leave Sharp, one of the biggest hospital operators in San Diego, with little cash and no ability to continue its charitable and trust obligations.

Lungren said Friday that his office would end its investigation of the proposed partnership.

Consumers Union and a number of other consumer watchdog groups also applauded Sharp’s decision.

“Sharp’s action [Friday] is a step toward regaining the trust of the San Diego community, said Julio Mateo Jr., a spokesman for Consumers Union.

Shares of Nashville-based Columbia/HCA fell 62.5 cents to close at $43.375 on the New York Stock Exchange.