Tenet drops bid for Healthscope

Tenet Healthcare Corp., Dallas, said it has pulled out of the bidding for Healthscope, a Melbourne, Australia-based company that operates 48 hospitals in Australia and a pathology business in Australia, Malaysia, New Zealand and Singapore.

Tenet said that it needed to drop out of the bidding “to eliminate a prolonged period of uncertainty and market speculation.” Tenet said the premature disclosure of its interest did not leave the company enough time to explain the potential value of the acquisition to its shareholders.

Tenet stock dropped by 17% last week, from $5.72 per share to $4.72 per share, after an Australian newspaper reported the news of its roughly $1.5 billion bid for Healthscope. The stock recovered some of that loss last week, and then traded above $5 per share Monday afternoon after the announcement.

Two groups of private-equity firms, including four U.S. companies, are also bidding on Healthscope, according to published reports.