Triad Takes New Deal

Now Community Health (CYH Quote - Cramer on CYH - Stock Picks) and Triad (TRI Quote - Cramer on TRI - Stock Picks) have wedding plans.

Community has agreed to pay $54 a share for Triad -- topping a leveraged buyout offer of $50.25 a share for the company -- in a deal valued at $6.8 billion. Community, best known as a rural hospital operator, is now set to emerge as the largest publicly traded hospital company in the country.

"This deal will substantially increase [Community's] overall scale and enhance its geographic diversity," Community CEO Wayne Smith said on Monday. "This is a strategic growth opportunity."

Sheryl Skolnick, senior vice president of CRT Capital Group, thought Triad might attract another suitor. She has, therefore, maintained her buy recommendation on Triad's stock throughout a so-called go-shop period that has now drawn to a close.

Still, Skolnick was surprised by the latest development. She points out that Community could have chosen to bid on LifePoint (LPNT Quote - Cramer on LPNT - Stock Picks) -- another rural hospital operator in its own neighborhood -- instead of seeking out a larger hospital chain in a different part of the country.

To Skolnick, LifePoint looks like one of few hospital companies that could still attract a buyer. HCA has already gone private in one of the biggest LBOs ever. Meanwhile, Health Management Associates (HMA Quote - Cramer on HMA - Stock Picks) has pulled off a financial restructuring -- complete with significant amounts of debt-- that essentially serves as a poison pill for would-be suitors. And Universal Health (UHS Quote - Cramer on UHS - Stock Picks) can pursue a deal only if its leaders, who control the company's voting stock, wish to do so.

« Previous Page

1 2

Next Page »