SUN HEALTHCARE GROUP: TO ACQUIRE REGENCY HEALTH SERVICES

      Albuquerque, NM-based Sun Healthcare Group Inc. and Tustin,
 CA-based Regency Health Services Inc. have announced an agreement
 under which Sun will acquire all of the outstanding shares of
 Regency for $22 per share, or approximately $369 million in cash. 
 In addition, approximately $220 million of Regency debt will be
 assumed or refinanced by Sun.  Sun is an international provider
 of diversified long-term care services.  Regency is an operator
 of skilled nursing facilities and a provider of rehabilitation
 therapy, institutional pharmacy and home health services. 
 Sun expects to complete the deal during the fourth quarter of
 1997 (Sun Healthcare release, 7/27).  
      BIGGER IS BETTER
      Andrew Turner, Sun chairman and CEO, said that "bigger is
 better, especially in negotiations between nursing home operators
 and the managed-care industry."  Turner added, "If one has a
 larger number of facilities, it's more likely that you will be
 able to negotiate than if you have little to offer." Richard
 Matros, Regency's CEO, said "recent consolidations have created
 companies with billions of dollars in sales, putting smaller
 companies like Regency at a disadvantage."  He added, "Why would
 people on Wall Street bring (acquisition) deals to us when they
 have $3-billion guys to go to?  That meant we had to size up"
 (Marsh, Los Angeles Times, 7/29).  Upon completion of the Regency
 acquisition, Sun will operate 510 long-term care facilities in
 the United States and the United Kingdom with a total of 49,141
 beds, and 47 assisted living facilities, with 4,583 units.  Sun
 expects annualized revenues in excess of $3 billion in 1998 (Sun
 Healthcare release, 7/27).
      CALIFORNIA DREAMING
      According to the Times, "Sun Healthcare expects Regency's
 businesses would strengthen its presence in California.  Regency
 owns 116 nursing homes, including 42" in California.  Sun
 Healthcare currently "operates 17 nursing homes in California"
 (7/29).