Deutsche Bank Reports Community Health System Bid For Tenet Healthcare Rejected

Deutsche Bank reports Community Health Systems' CYHbid on Tenet Healthcare THC was rejected. In a note to clients, Deutsche Bank reports, "CYH went public with a surprise $6/share bid for THC comprised of $5/share in cash and $1/share in CYH stock. The offer has been rejected by THC's board, and the situation looks like it will set off a contentious M&A battle in the hospital space based on THC's hostile rejection letter. We can't rule out a competing offer by private equity, and we believe the potential upside accretion to CYH in a CYH-THC combination could ultimately drive THC shares > $6 if other bidders emerge and a bidding war ensues. Maintain Buy and $7.50/share valuation." THC closed yesterday at $4.29.