
Tenet in Community Health's Sights
NEW YORK (
) --
Tenet Healthcare
(THC) - Get Report
has apparently been playing hard to get for nearly a month, sitting on an acquisition offer with a roughly 40% premium then rejecting it earlier this week.
The company's suitor,
Community Health Systems
(CYH) - Get Report
, took its case public after Thursday's closing bell, laying out the details of the bid, which it says is worth an estimated $7.3 billion, including $4 billion in net debt. Community Health said it made its initial offer on Nov. 12, and that Tenet subsequently spurned it on Dec. 6.
Community Health is offering a consideration of $6 per share for Tenet. The stock closed Thursday's regular session at $4.29, and its 50-day moving average is $4.43. The per share breakdown of the consideration is $5 in cash and $1 worth of Community Health common stock.
"The combination of CHS and Tenet would be both financially and strategically compelling," said Community Health in its press release, which included a copy of its latest letter to Tenet. "The combined company would have approximately $22 billion in pro forma annual revenue and own or operate 176 hospitals in 30 states with a total of 32,830 licensed beds."
Community Health, which said it was "surprised and disappointed" by what it termed Tenet's "flat rejection" of its offer, said it estimates the deal would add to its earnings in the first year after its completion, excluding one-time costs related to the transaction.
There was no word from Tenet yet on why it rejected the offer. A spokesperson for the Dallas-based hospital operator was immediately available for comment. Community Health quotes Tenet as saying the proposal doesn't represent "even remotely fair value" to its shareholders in its letter.
Investors were already
pushing the stock beyond the bid price in after-hours action
. The shares last changed hands at $6.40, up more than 49%, on volume of 3.8 million.
Community Health, which is headquartered in Franklin, Tenn., plans to hold a conference call to discuss the bid for Tenet at 10:30 am ET on Friday.
--
Written by Michael Baron in New York.
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