Mergers affecting £1bn of NHS services have been thrown into doubt after a key participant pulled out of the running to take over a neighbour.

St George’s Healthcare Trust in south London withdrew its bid to take over St Helier Hospital, part of Epsom and St Helier Hospitals Trust.

Tooting-based St George’s was the sole bidder to take over St Helier, while Ashford and St Peter’s Hospitals Foundation Trust is the only candidate left in the running to take over Epsom.

Jan Sawkins, independent chair of the board set up to help Epsom and St Helier achieve foundation trust status, said: “Whilst we have always been aware that a bidder could withdraw during the process, at this stage in the transaction it is obviously very disappointing news.  

“The transaction board has a meeting scheduled next week and we will use this to consider the options and agree a way forward. This may include re-opening tenders for St Helier hospital.” 

HSJ understands the move from St George’s is in response to a review of services across south west London being carried out by the primary care trust cluster.

The Better Services Better Value review has yet to report but could see significant changes in the services commissioners will pay for across the region, including greater concentration of maternity services.

The Royal Surrey County Hospital Foundation Trust’s bid for Epsom was withdrawn last year. The move by St George’s could see tenders re-opened for St Helier, and potentially Epsom too.

Ms Sawkins added: “It is the current belief that, subject to Ashford and St Peter’s Foundation Trust being confirmed as the preferred partner for Epsom Hospital, the de-merger could continue whilst we make alternative arrangements for St Helier.

“Whilst this would, of course, need further investigation and approval by the transaction board, the trust board and others, it is felt that this would be in the best interest of Epsom Hospital, its patients, staff and local people.

“However, I would emphasise that the priority remains to secure the future of Epsom and St Helier hospitals.”

St George’s has a turnover of £556m, compared to Epsom and St Helier’s £329m and Ashford and St Peter’s £224m.

Matthew Hopkins, chief executive of Epsom and St Helier, said: “This is disappointing news, but St George’s have been clear to us that their decision is not based on our staff, nor the quality of the services we provide at St Helier hospitals.

“As you would expect, the trust board and those working on the transaction have been looking at other options in case this happened and we look forward to discussing these with the transaction board next week.”