Essent's Future....11/25

I suggested to a person in the industry that there are only a few possibilities for Essent: Sell or turn into a kinder, gentler Essent--more of what they pitched to Paris in the courtship.


He replied:

Hud was the central focus of this whole thing. With him gone, the venture capital guys have to either expend a lot of effort to put a new team in place and hope that things improve or they can cut their losses, get what they can through a sale and move on to something else. I don't think any of them have a particular passion to manage hospitals. If the company were bigger, I could see them wanting to salvage things with a new management team. But with just 5 hospitals, I'm guessing they'll let someone else have them.

The sale might be compromised by the pending settlement with Hud, depending on the length of time it takes. Ironically, he might be the only winner in this mess, or the spoiler that will destroy the value for everyone. I'm betting on the petulant child.



What could that do for or to Paris? The biggest problem Paris has is the joining of the two hospitals. Too much property, too many duplicated services, and a lack of competition to make it work. If Hud holds out, it could force a fire sale, or, an actual bankruptcy that might split it up (how long have I been saying this?) Or, if he settles early, we're stuck with the status quo.

I can't see any progress on the new Heart Hospital. This was originally delayed until April from the new year. What is the projection now? If Essent is going to bluff it out, it almost has to get going with the plans to show that management hasn't slipped.


I'd say they're dancing on banana peels.