Tenet Healthcare shareholders have filed a suit against the company's board members arguing they breached their fiduciary duty by adopting changes to the company's bylaws that prevents a takeover by Community Health Systems, according to a Dallas Business Journal news release.
The suit, which was filed by the Indiana Electrical Workers Pension Trust Fund IBEW, names ten Tenet board members including Florida Governor Jeb Bush, in the suit.
CHS offered to by Tenet for $6 a share, but Tenet rejected the offer. CHS vowed to continue with a hostile takeover of the hospital operator. Tenet responded by adopting a "poison pill" provision to make a takeover more difficult. Under the provision, if any person or firm buys more than 4.9 percent of Tenet's shares without its board's approval, the poison pill anti-takeover device allows all other shareholders who own less than that percentage of shares the right to buy additional shares at a bargain price.
The board also removed annual meeting timing requirements from its bylaws, which allowed the company to delay its board meeting for 2011.
Read the Dallas Business Journal report on Tenet.
Read more coverage on Tenet:
- CHS Plans to Nominate Full Slate of 10 Directors to Tenet Board
- Analysts Boost Tenet's Value Over What Community Health Offered
- CHS Urges Tenet to Engage in Merger Discussions After "Poison Pill" Measure
The suit, which was filed by the Indiana Electrical Workers Pension Trust Fund IBEW, names ten Tenet board members including Florida Governor Jeb Bush, in the suit.
CHS offered to by Tenet for $6 a share, but Tenet rejected the offer. CHS vowed to continue with a hostile takeover of the hospital operator. Tenet responded by adopting a "poison pill" provision to make a takeover more difficult. Under the provision, if any person or firm buys more than 4.9 percent of Tenet's shares without its board's approval, the poison pill anti-takeover device allows all other shareholders who own less than that percentage of shares the right to buy additional shares at a bargain price.
The board also removed annual meeting timing requirements from its bylaws, which allowed the company to delay its board meeting for 2011.
Read the Dallas Business Journal report on Tenet.
Read more coverage on Tenet:
- CHS Plans to Nominate Full Slate of 10 Directors to Tenet Board
- Analysts Boost Tenet's Value Over What Community Health Offered
- CHS Urges Tenet to Engage in Merger Discussions After "Poison Pill" Measure