Tags: Community Health | Tenet

Community Health Raises All-Cash Offer for Tenet

Monday, 02 May 2011 09:22 AM

Community Health Systems Inc. has raised its all-cash offer for rival hospital operator Tenet Healthcare Corp. by 21 percent to about $3.52 billion, but it said Monday the latest bid will last only until May 9.

The Franklin, Tenn. company said its "best and final offer" of $7.25 a share will expire then unless it sees meaningful engagement from Tenet.

Dallas-based Tenet's board rejected the $6 per-share, all-cash offer from Community Health last month, and the companies have been fighting over a deal since last fall.

Tenet shares sank nearly 8 percent, or 53 cents, to $6.40 in pre-market trading on Monday.

Community had offered in November to buy Tenet for $5 per share in cash and $1 per share in stock. It then took the offer to Tenet shareholders in December after Tenet rejected that bid. Community said in January it would nominate its own slate of directors to Tenet's board.

Tenet filed a lawsuit last month claiming Community Health bilks Medicare by admitting patients to its hospitals when they should only be kept under observation, a practice that Tenet said leads to artificial inflation of Community Health's stock price.

Community Health denied the allegation and asked a judge to dismiss the lawsuit. It then switched its cash-stock offer to an all-cash offer of $6 per share before increasing it to $7.25 per share on Monday.

Community Health said Monday in a letter to Tenet directors that it was time "to move beyond lawsuits and rhetoric."

But Community Chairman and CEO Wayne T. Smith said in a statement accompanying the letter that his company will withdraw the latest offer "and move on to the many other compelling growth opportunities available to us" unless it sees meaningful engagement by May 9.

It said the latest offer provides shareholders a 69 percent premium to the stock price before it made its initial proposal public in December.

Community Health runs about 130 hospitals in fast-growing and non-urban markets while Tenet's 49 hospitals are in urban and suburban markets.

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Community Health Systems Inc. has raised its all-cash offer for rival hospital operator Tenet Healthcare Corp. by 21 percent to about $3.52 billion, but it said Monday the latest bid will last only until May 9. The Franklin, Tenn. company said its best and final offer of...
Community Health,Tenet
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2011-22-02
 

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