A buyer has emerged for several Florida hospitals owned by a health giant in bankruptcy

A hospital network in Central Florida wants to buy several Florida hospitals owned by the troubled Steward Health Care System.

Orlando Health is targeting the Space Coast area hospitals owned by Steward, the Dallas-based healthcare giant that filed Chapter 11 bankruptcy and put its hospitals up for sale, including those in Miami-Dade and Broward.

The private not-for-profit hospital system is offering Steward Health up to $439.4 million in cash for the northern Florida hospital operations, court records show. The sale would include Rockledge Regional Medical Center, Melbourne Regional Medical Center, Sebastian River Medical Center, as well as its Steward Medical Group Practices in northern Florida.

“We have seen repeatedly that when Orlando Health enters a new area, patient care improves, relationships with physicians and team members grow stronger and surrounding communities benefit,” Orlando Health President and CEO David Strong said in a statement. “We believe we can recreate these same results for patients, team members, physicians and the communities in which these hospitals are located.”

While the two healthcare systems have entered into a purchase agreement, interested buyers still have until Aug. 26 to make their own offers for the hospitals.

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But any future bids will need to be higher or better then Orlando Health’s offer, Steward Health announced. That’s because the company has selected Orlando Health’s offer as the “stalking horse” bid, which essentially sets the floor price for its operations.

If Steward gets additional “qualified bids” for the Space Coast operations, an auction could be held, the news release said.

Even if Orlando Health’s bid comes out on top, there’s a chance that how much it will pay for Steward’s northern operations could change. The deal would need to be approved in bankruptcy court and is expected to close in the fourth quarter of 2024 “should Orlando Health emerge as the winning buyer at the auction,” Steward said. If an auction is held, it would be on Aug. 29, with a court hearing to approve the hospital sales on Sept. 10.

Steward Health is also selling its South Florida hospitals, which include Palmetto General Hospital in Hialeah, Coral Gables Hospital, Hialeah Hospital, North Shore Medical Center in North Miami-Dade and Florida Medical Center in Lauderdale Lakes. There’s no word yet on whether the healthcare giant has received any “qualified bids” for those hospitals. A few days ago, Steward extended the bid deadline for all of its Florida hospitals to Aug. 26.

The hospital sales are part of the healthcare giant’s plan to thin debt after filing for bankruptcy under Chapter 11 in May. The company has been quickly trying to sell all 31 of its U.S. hospitals, and a few days ago also found a buyer for its nationwide physician network.

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Mark Rich, the president of Steward Health Care, said Orlando Health’s bid “reinforces the attractiveness” of his company’s operations.

“We look forward to reviewing any additional bids that are received between now and August 26, and are encouraged by Orlando Health’s vote of confidence in our northern Florida operations,” Rich said in a statement.

Orlando Health is a 3,487-bed system that serves the southeastern United States and Puerto Rico. It has 17 hospitals, 10 free-standing emergency rooms, 9 Hospital Care at Home programs, skilled nursing facilities, an in-patient behavioral health facility, and more than 375 outpatient facilities that include clinics, imaging and laboratory services, wound care centers, home healthcare services and urgent care centers, Orlando Health said in a news release.

More than 4,950 physicians have privileges across the Orlando Health system, which has more than 29,000 employees, including more than 1,500 physicians. Orlando Health has expanded into the Tampa Bay area in recent years, and also made a $910 million cash deal to buy a 70% stake in five Alabama hospitals managed by Tenet Healthcare, according to Health News Florida. The deal would make Orlando Health a managing partner of Brookwood Baptist Health, which includes the five Alabama hospitals, along with affiliated physician practices and operations, and would turn over day-to-day operations at the facilities to Orlando Health, according to the report.