An acute trust and a mental health provider in the West Midlands will compete to take over a neighbouring community trust after both were shortlisted as preferred bidders to run the struggling provider.

Shropshire Community Healthcare Trust has shortlisted Shrewsbury and Telford Trust and South Staffordshire and Shropshire Healthcare Foundation Trust as the preferred organisations to acquire it.

Shropshire Community Healthcare is one of 18 standalone community trusts in England and in 2016 declared itself “unsustainable”.

Bids from Shrewsbury and Telford and South Staffordshire and Shropshire Healthcare were submitted in December and have been taken forward.

A final decision is expected to be made by Shropshire Community Healthcare in March, following approval by NHS Improvement.

South Staffordshire and Shropshire Healthcare is also pursuing a merger with neighbouring community provider Staffordshire and Stoke on Trent Partnership Trust. In October, the trusts, which share a chief executive, announced the intention to merge by April 2018.

Shropshire Clinical Commissioning Group is carrying out a review of community services in the area including provision of community beds and minor injury units.

Exclusive: Senior leaders of three trusts to recommend merger