For years, Universal Health Services ( UHS) has relied on a real estate investment trust -- spawned and now run by the company itself -- for deeply discounted lease rates on hospitals and medical office buildings.

However, the hospital operator could see that lucrative arrangement come to an end. The REIT, known as Universal Health Realty Income Trust ( UHT), or UHT, recently fielded a buyout offer from an unidentified party that could seek true market rates for the Universal leases. UHT rejected that offer, without explanation, but still looks like a ripe takeover candidate to some.

Currently, Universal owns just 6.7% of UHT and has only one director -- Chairman Alan Miller -- on UHT's board. However, Universal relies on its own executives to run UHT and even pockets an annual fee, totaling more than $1 million, for its services. Under that arrangement, Universal has long managed to secure cheap lease rates for much of UHT's property. Up to now, Universal -- which provides more than half of UHT's revenue -- has always ranked as the REIT's largest tenant.

But some investors, citing the recent buyout offer, believe that Universal could lose control of the REIT. UHT originally responded to that offer by rewarding shareholders with a raised dividend on its own. However, the company still pays a smaller dividend than some of its peers and, some people say, pockets less from its Universal leases than another owner probably would.

Ultimately, some critics believe, Universal has been operating UHT in a manner that benefits its own shareholders at the expense of UHT itself. And UHT's decision to avoid new ownership -- which could have unlocked the real value of many UHT properties -- has raised fresh questions about the closely intertwined companies.

"There could be some attention given to the close ties between UHS and UHT," Merrill Lynch analyst David Tsoupros acknowledged, when upgrading UHT to buy following last month's buyout offer. "These close ties were once commonplace but have become increasingly rare in the post-Sarbanes-Oxley world."

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