Community Health announces revised all-cash Tenet bid

Community Health Systems, Franklin, Tenn., announced a revised, all-cash $7.3 billion offer to acquire Tenet Healthcare Corp., according to a Community news release. Community's offer is still valued at $6 per share.

Under the revised offer, made in a letter to Tenet's board of directors, according to the release, Community would pay Tenet shareholders all in cash. Previously, Community offered Tenet shareholders $5 in cash per share plus $1 worth of Community stock. Tenet has agreed to review the new offer, according to a Tenet news release (PDF). Community's shares plunged last week after Dallas-based Tenet filed a federal securities lawsuit alleging that Community was boosting its Medicare reimbursements by improperly admitting patients who should have remained in observation status.

"Despite the value-destroying defensive tactics employed by the Tenet board, we remain ready to engage in constructive discussions to move this transaction forward without further delay," said Wayne Smith, Community Health chairman, president and CEO, in the release. "We are confident that our business practices are appropriate and we will respond in detail to Tenet's claims in due course," he said.

In late afternoon trading, the shares of both companies were down. Community's shares were down more than $1.25, or more than 4% from Friday's close, to $30.59, although the stock had rebounded from its intraday low of $27.35. Tenet was down 11 cents, a 1.7% drop to $6.55 per share. All figures are according to quote.com.

Tenet has rejected Community's offer, which includes the assumption of $4 billion in debt, and amended its bylaws to push its annual meeting back to November. Community also announced that it would conduct a conference call on April 28 to discuss its first-quarter results and respond to Tenet's lawsuit. Community will release its first-quarter results after the markets close on April 27, according to the company's news release.