NEW YORK (TheStreet) -- TheStreet's Gregg Greenberg spoke to Paula Schapp, assocate editor at The Deal, about Tenet Healthcare's (THC) - Get Tenet Healthcare Corporation Report acquisition of Vanguard Health Systems (VHS) .
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
Health Management Associates
Schapp expects the Vanguard-Tenet deal to be approved.
-- Written by Bret Kenwell in Petoskey, Mich.
Bret Kenwell currently writes, blogs and also contributes to Rocco Pendola's Weekly Options Newsletter. Focuses on short- to intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.