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Community Health makes all-cash hostile offer for Tenet

By Palm Beach Business.com

 DELRAY BEACH — Community Health Systems, a for-profit hospital chain based in Franklin, Tenn., is now offering all cash in its hostile attempt to take over Tenet Healthcare Corp., owner of Delray Medical Center and the largest hospital operator in South Florida.

CHS is now offering $6 per share in cash for all outstanding shares of Tenet. The previous CHS offer was for $5 per share in cash and $1 per share in CHS common stock. The new offer was made in a letter to Tenet’s board of directors Monday.

Tenet previously rejected the CHS bid, and has sued CHS in an attempt to fend off the takeover attempt.

“Converting our offer to all cash underscores our commitment to completing this transaction and renders Tenet’s irresponsible and inaccurate lawsuit irrelevant to our offer,” CHS chairman and CEO Wayne T. Smith said. “We are confident that our business practices are appropriate and we will respond in detail to Tenet’s claims in due course. We are confident that Tenet shareholders will hold the entrenched Tenet Board accountable for this scorched earth response to our acquisition proposal.”

CHS made its its $6-a-share bid for Tenet last November, and publicly announced it a month later after Tenet’s board had rejected the offer. At the time it was made, the offer represented a 40 percent premium over Tenet’s trading price.

In January, CHS gave notice that it intends to nominate a full slate of 10 directors for election to Tenet’s board at the 2011 annual shareholders meeting. Tenet has delayed the meeting until Nov. 3.

CHS owns, leases or operates 130 hospitals in 29 states, including the North Okaloosa Medical Center in Crestview and the Lake Wales Medical Center in Florida. It reported $13 billion in revenue in 2010.

Tenet owns the Delray Medical Center, Pinecrest Rehabilitation Hospital and Fair Oaks Pavilion in Delray Beach, the West Boca Medical Center, St. Mary’s and Good Samaritan medical centers in West Palm Beach and Palm Beach Gardens Medical Center.

It also operates hospitals in Broward and Miami-Dade counties, including North Shore Medical Center.

 

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DELRAY'S ONLINE BUSINESS AND COMMUNITY NEWSPAPER — PALM BEACH BUSINESS.COM
   
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APRIL 18, 2011 click to go home
 
         
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