The Federal Trade Commission and Securities and Exchange Commission are delving further into the pending transaction between Franklin, Tenn.-based Community Health Systems and Naples, Fla.-based Health Management Associates, but CHS still expects the deal will close early next year.
In a news release, CHS said it received a request from the FTC for additional information related to its pending acquisition of Health Management, estimated to be worth $7.6 billion. CHS said the FTC's action, which is called a second request under the Hart-Scott-Rodino Antitrust Act, was "anticipated." CHS did not indicate what additional information the FTC requested.
CHS also said the SEC has not yet reviewed the company's merger prospectus. A merger prospectus essentially outlines all details of a proposed merger. The company said it expects the SEC to sign off on the prospectus once Health Management's new board of directors approves the deal. CHS expects this to be completed in the middle of November. However, 70 percent of all Health Management shareholders must also OK the deal, and that special meeting is expected to be held by the end of the year.
Last month, CHS and Health Management signed an amendment and consent agreement. Under the deal, Health Management hired additional financial and legal advisers to ensure the financial terms of the acquisition are fair. The financial firms, Lazard Frères & Co. and UBS Securities, have until Nov. 19 to render any opinions on the deal. If Health Management decides to back out of the deal, it would have to pay CHS a minimum termination fee of $109 million.
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