Community Health Systems Makes $6/Share All-Cash Offer for Tenet (CYH, THC)

Community Health Systems CYH today announced that it is now offering $6.00 per share in cash to acquire all outstanding shares of Tenet Healthcare Corporation THC. The previous CHS offer was for $5.00 per share in cash and $1.00 per share in CHS common stock. The new offer was made in a letter to Tenet's Board of Directors today. Wayne T. Smith, chairman, president and chief executive officer of CHS, said, “Converting our offer to all cash underscores our commitment to completing this transaction and renders Tenet's irresponsible and inaccurate lawsuit irrelevant to our offer. We are confident that our business practices are appropriate and we will respond in detail to Tenet's claims in due course. Tenet shareholders should be outraged by the billions of dollars in shareholder value that the Tenet Board has destroyed for its own shareholders and the industry at large as a result of its reckless and self-serving allegations. We are confident that Tenet shareholders will hold the entrenched Tenet Board accountable for this scorched earth response to our acquisition proposal.” Mr. Smith continued, “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. As we have made clear, we would welcome the opportunity to review any additional information Tenet can provide and are prepared to recognize any additional value it can demonstrate.” Each of Credit Suisse and Goldman Sachs has informed CHS that, subject to customary terms and conditions, it is highly confident that financing for CHS's all-cash offer for the outstanding shares of Tenet can be obtained in the capital markets. On December 9, 2010, CHS made public an offer to acquire Tenet for $6.00 per share, including $5.00 per share in cash and $1.00 per share in CHS common stock. The offer represented a 40% premium to Tenet's unaffected stock price. The offer was made in a letter to Tenet's Board of Directors on November 12, 2010, and rejected by Tenet on December 6, 2010. On January 14, 2011, CHS gave the required notice to Tenet that it intends to nominate a full slate of 10 independent director nominees for election to Tenet's Board of Directors at its 2011 Annual Meeting. Tenet has delayed the meeting until November 3, 2011, and its entire Board is up for reelection. Credit Suisse and Goldman, Sachs & Co. are acting as financial advisors, Kirkland & Ellis LLP as legal counsel and D. F. King & Co. as proxy solicitor for CHS.