BlackRock has joined other large bargain hunters buying Community Health Systems stock. The asset management giant reported Wednesday that it bought 1.5 million CHS shares and now owns 12.4 million shares, or 10.9%, of the troubled hospital chain.
New York City-based BlackRock is now CHS' second-largest shareholder behind only Chinese billionaire Tianqiao Chen and affiliates of his private investment firm Shanda. Chen and Shanda own 15.5 million shares or 13.8% of CHS.
BlackRock's regulatory filing was a 13G form, connoting a passive investment in the company rather than an activist one to drive changes in management or control.
At the end of September, BlackRock's stake in CHS was 10.9 million shares or 9.6% of outstanding shares. A BlackRock spokeswoman declined to comment Wednesday.
CHS is selling off hospitals and considering the sale of the entire company in the face of a $15 billion debt.
The Franklin, Tenn.-based company, the nation's second-largest investor-owned hospital chain, posted a net loss of $79 million in the third quarter and has watched its stock price fall from $40 a year ago to less than $4.66 today.
Earlier this week, Camber Capital of Boston reported that it had raised its stake in CHS to 5.5%, triggering a required filing with the U.S. Securities & Exchange Commission to note its elevated stake.
Camber Capital's filing also signaled a passive investment. Chen previously announced that his Shanda affiliates have no interest in buying or controlling CHS. A CHS spokeswoman declined to comment Wednesday.
CHS is divesting 17 hospitals, outpatient real estate and an 80% stake in its home-health business to raise $1.2 billion to pay down debt.
The company raised a similar amount in April when it spun off 38 rural hospitals into a separate, public company, Quorum Health Corp.
