At $21 per share, the deal represents a 70% premium over Friday's closing price. Tenet will also take on an additional $2.54 billion of Vanguard's debt, causing concern from shareholders that the company has potentially overpaid, according to Greenberg.
However, Schapp insists Tenet did not overpay, and said that on a valuation level this deal is right in the ballpark for similar types of takeovers.
While Tenet has most of its exposure in California, Texas and Pennsylvania, Vanguard has most of its exposure in the Midwest.When asked about the possible effect of Obamacare, Schapp said that it will be a huge driver for health care companies to make these types of acquisitions as a way of increasing revenue and patients. Specifically, she said analysts are discussing Community Health Systems (CYH) looking at Health Management Associates (HMA). Schapp expects the Vanguard-Tenet deal to be approved. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell