Community Health is preparing for a hostile takeover of Dallas-based Tenet Healthcare in response to the Tenet board's rejection of its $7.3 billion offer, according to a report by the Tennessean.
With all 10 members of Tenet's board up for re-election at the company's 2011 shareholders meeting, as yet unscheduled, Franklin, Tenn.-based Community Health is compiling its own slate of Tenet board nominees.
"We believe Tenet shareholders would be best served by a board focused on maximizing shareholder value," said Community Health CEO Wayne T. Smith. "We intend to propose directors who will look out for the interests of Tenet shareholders."
Shareholders may like Community Health's bid, which provided a 40 percent premium over Tenet's stock price on the day the bid was made public. However, some analysts believe Community Health's bid for Tenet is too low, leaving room for rival bidders to offer more.
Community and Tenet have roughly half of their shareholders in common. The mutual fund Franklin Templeton Investments holds the largest shares in both companies.
The Tenet shareholders meeting could take place as late as next fall, analysts said. Tenet's bylaws suggest Community Health would have to make formal nominations between Jan. 5 and Feb. 4, but Tenet could schedule its 2011 shareholders meeting as late as 18 months from the date of its previous meeting, held on May 5, 2010.
Read the Tennessean report on Tenet Healthcare.
Read more coverage of Community Health Systems' bid for Tenet.
-CHS Still Committed to Acquiring Tenet
-Community Health's Bid to Buy Tenet May Not be Over
-Tenet Rejects $3.3B Bid From Community Health Systems
With all 10 members of Tenet's board up for re-election at the company's 2011 shareholders meeting, as yet unscheduled, Franklin, Tenn.-based Community Health is compiling its own slate of Tenet board nominees.
"We believe Tenet shareholders would be best served by a board focused on maximizing shareholder value," said Community Health CEO Wayne T. Smith. "We intend to propose directors who will look out for the interests of Tenet shareholders."
Shareholders may like Community Health's bid, which provided a 40 percent premium over Tenet's stock price on the day the bid was made public. However, some analysts believe Community Health's bid for Tenet is too low, leaving room for rival bidders to offer more.
Community and Tenet have roughly half of their shareholders in common. The mutual fund Franklin Templeton Investments holds the largest shares in both companies.
The Tenet shareholders meeting could take place as late as next fall, analysts said. Tenet's bylaws suggest Community Health would have to make formal nominations between Jan. 5 and Feb. 4, but Tenet could schedule its 2011 shareholders meeting as late as 18 months from the date of its previous meeting, held on May 5, 2010.
Read the Tennessean report on Tenet Healthcare.
Read more coverage of Community Health Systems' bid for Tenet.
-CHS Still Committed to Acquiring Tenet
-Community Health's Bid to Buy Tenet May Not be Over
-Tenet Rejects $3.3B Bid From Community Health Systems