Tenet Healthcare, the Texas-based for-profit hospital chain that owns Hahnemann and St. Christopher's Hospital in Philadelphia, says it's weighing a revised merger offer from Community Health Systems, a Tennessee-based for-profit hospital chain that owns Chestnut Hill Hospital, Phoenixville Hospital and around 150 others.
The new offer is for $6 a share, cash. The previous offer was for $5 in cash plus $1 in Tenet stock. In a brief statement Tenet said it will evaluate the offer, but noted the value is the same as Community's previous, rejected proposal.
After Tenet said No to Community's first offer, it sued Community, alleging Medicare fraud in the way Community files for federal subsidies. Meanwhile, Community is trying to oust Tenet's board in elections later this year.
In a statement today Community boss Wayne T. Smith condemned "Tenet's irresponsible and inaccurate lawsuit" and its "reckless and self-serving allegations", and called it "irrelevant to our offer" and an "outrage" to Tenet shareholders. Hospital chain prices fell sharply in the wake of Tenet's suit last week.
Smith added: "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... Credit Suisse and Goldman Sachs (have) informed CHS that, subject to customary terms and conditions, (each is) highly confident that financing for CHS's all-cash offer for the outstanding shares of Tenet can be obtained in the capital markets."
The Tenet-Community fight puts Drexel's newly inaugurated President, John Fry, in a key position: Hahnemann is Drexel's teaching hospital, giving Fry a major say in its operation; at the same time, he sits on the Community board.