Tug of war

Com­mu­nity raises of­fer as Tenet pro­ceeds with suit

Modern Healthcare - - The Week In Healthcare - Vince Gal­loro

The cor­po­rate con­trol battle be­tween Com­mu­nity Health Sys­tems and Tenet Health­care Corp. took an un­ex­pected step to­ward its con­clu­sion last week. But Com­mu­nity’s legal trou­bles, in­clud­ing the law­suit Tenet filed against the com­pany last month, show no sign of abat­ing just yet.

Com­mu­nity raised its of­fer to $7.25 a share, ac­cord­ing to a May 2 news re­lease. The of­fer’s to­tal value, in­clud­ing as­sumed debt, is $8.1 bil­lion. The Franklin, Tenn., com­pany also set a dead­line of 6 p.m. East­ern time May 9 for Tenet to “be­gin good-faith dis­cus­sions,” or else Com­mu­nity will with­draw the of­fer and its slate of nom­i­nees for elec­tion to Tenet’s board of direc­tors at its Nov. 3 an­nual share­hold­ers meet­ing. Ap­pear­ing at the Deutsche Bank health­care in­vestors con­fer- ence in Bos­ton on May 2, Larry Cash, ex­ec­u­tive vice pres­i­dent and CFO, de­fined “good­faith dis­cus­sions” as an of­fer from Tenet to be­gin plan­ning due dili­gence to­ward ne­go­ti­at­ing a de­fin­i­tive agree­ment.

On the same day, how­ever, Dal­las-based Tenet filed a mo­tion to be­gin dis­cov­ery in its fed­eral law­suit against Com­mu­nity, out­lin­ing the doc­u­ments that Tenet con­tends share­hold­ers need to see in or­der to make a de­ci­sion on Com­mu­nity’s bid to buy Tenet, ac­cord­ing to a se­cu­ri­ties fil­ing.

Tenet’s court fil­ing, made in the case it filed April 11 in U.S. District Court in Dal­las, seeks a broad range of doc­u­ments from Com­mu­nity. These in­clude doc­u­ments re­lated to: Com­mu­nity’s ad­mis­sions cri­te­ria

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