Magellan to Sell Psychiatric Hospitals

Magellan Health Services Inc. agreed to sell its psychiatric hospitals to Crescent Real Estate Equities Co. for $400 million. The 92 hospitals will be run by a joint venture of Magellan and an affiliate of Crescent, a New York-based real estate investment trust controlled by Texas billionaire Richard Rainwater. Last year, Rainwater and his wife, Darla Moore, bought a 12% stake in Magellan, the largest provider of managed-care mental health services. Magellan can now concentrate on its plans for mental health patients, where revenue is rising, and get out of the real estate business, analysts said. Shares in Atlanta-based Magellan rose $2.50 to a 52-week high of $26. Crescent shares were unchanged at $53. Both trade on the New York Stock Exchange. Magellan plans to pay down $200 million in debt with the proceeds, leaving it with $200 million for acquisitions.