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, according to the report. Use of the device drives up the price of acquiring a company and dilutes the shares of the potential acquirer.
CHS offered a $3.3 billion equity bid to acquire Tenet in December, which was rebuked.
An analyst said in the report that while the poison pill device does make a takeover more difficult, it does not make it impossible as CHS could still run its own board slate and solicit proxies.
Read The Tennessean report on Tenet.
Read more coverage on CHS’s attempt to acquire Tenet:
– Shareholder Files Suit Against Tenet for Rejecting Community Health Offer
– Community Health Prepares For Hostile Takeover of Tenet
– CHS Still Committed to Acquiring Tenet
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