One week after Tenet Health sued its aggressive suitor, Community Health Systems, for overbilling, CHS has revised its $3.3 billion bid for Tenet into an all-cash offer of $6 per share, according to a CHS news release.
The previous offer, made in Nov. 2010, was for $5 per share in cash and $1 per share in CHS common stock. Tenet had rejected the offer in Dec. 2010, saying it "grossly undervalued" the hospital system, according to a Tenet statement.
Tenet says its board of directors will review the revised proposal, but Tenet's shareholders are advised to take no action at this time.
The hostile pursuit for Tenet intensified last week when the Dallas-based company sued CHS for overbilling Medicare and unnecessarily converting emergency department visits into inpatient admissions. Brentwood, Tenn.-based CHS has received a subpoena from the Department of Health and Human Services seeking documents from all its hospitals in connection with a probe on its billing services, according to a Wall Street Journal report.
CHS CEO Wayne T. Smith said the company is still persistent in acquiring Tenet, which would create a combined company with approximately $22 billion in revenue, according to the WSJ report.
"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," Mr. Smith said in the CHS release.
Read more about Tenet and CHS:
- CHS, Tenet Stocks Back on the Rise
- Tenet Sues CHS: New Battle Lines in Healthcare Takeovers — Whistleblowing
The previous offer, made in Nov. 2010, was for $5 per share in cash and $1 per share in CHS common stock. Tenet had rejected the offer in Dec. 2010, saying it "grossly undervalued" the hospital system, according to a Tenet statement.
Tenet says its board of directors will review the revised proposal, but Tenet's shareholders are advised to take no action at this time.
The hostile pursuit for Tenet intensified last week when the Dallas-based company sued CHS for overbilling Medicare and unnecessarily converting emergency department visits into inpatient admissions. Brentwood, Tenn.-based CHS has received a subpoena from the Department of Health and Human Services seeking documents from all its hospitals in connection with a probe on its billing services, according to a Wall Street Journal report.
CHS CEO Wayne T. Smith said the company is still persistent in acquiring Tenet, which would create a combined company with approximately $22 billion in revenue, according to the WSJ report.
"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," Mr. Smith said in the CHS release.
Read more about Tenet and CHS:
- CHS, Tenet Stocks Back on the Rise
- Tenet Sues CHS: New Battle Lines in Healthcare Takeovers — Whistleblowing