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Health and Healthcare

M&A Watch: The Good & Bad Of Tenet Getting Higher Buyout Price (THC, CYH)

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By Jon C. Ogg Published

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Tenet Healthcare Corporation (NYSE: THC) has good news and bad news this morning.  Community Health Systems, Inc. (NYSE: CYH) has done what many expected by raising its buyout offer for Tenet.  The company raised its offer to $7.25 per share from $6.00 in an all-cash offer.

Where the deal gets a bit convoluted is that this offer is “the best and final offer based on information currently available.”  

Community Health also said that it if Tenet does not begin good-faith discussions for a merger by 6:00 PM EST on May 9, 2011, then this new offer will expire and the company will also withdraw its proposed nominees it wanted elected to Tenet’s Board of Directors.

This is now called a 69% premium to the unaffected stock price when Community Health made its offer public. What is interesting is that Tenet holders and M&A speculators had always treated this as though a higher price was coming.  The current belief is that Tenet will reject this offer as well.

Tenet shares closed at $6.93 on Friday against a 52-week range of $3.92 to $7.70.  The pre-market trading indication have Tenet shares down over 7% at $6.42 on more than 4 million shares.  Community Health shares closed at $30.73 on Friday and we have yet to see any real moves in the shares.

JON C. OGG

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About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.

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