Tug of war
Community raises offer as Tenet proceeds with suit
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