Community Health to push Tenet board nominees to advance hostile takeover

Community Health Systems Inc., the largest publicly traded hospital company, plans to nominate directors for Tenet Healthcare Corp. to advance an unsolicited $3.3 billion takeover bid.

Community Health’s plan to sponsor board candidates is “solely to help advance its inadequate and opportunistic proposal,” Tenet said today in a statement. The bid of $6 a share, consisting of $5 in cash and $1 in stock, was announced Dec. 9, and rejected by Dallas-based Tenet as “not remotely fair value.”

Community Health made 8 acquisitions in the past 2 years, and 15 since 2005. There have been 315 acquisitions in the U.S. hospital industry in the past five years, with an average purchase price of $589 million and an average premium of 8 percent, according to data compiled by Bloomberg. Mergers in the industry increased as hospital patient admissions slowed because of economic conditions, Sheryl Skolnick, an analyst at CRT Capital Group in Stamford, Connecticut, said on Dec. 10.