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8-K - FORM 8-K - COMMUNITY HEALTH SYSTEMS INC | g27066e8vk.htm |
COMMUNITY HEALTH SYSTEMS RAISES ALL-CASH OFFER
FOR TENET HEALTHCARE TO $7.25 PER SHARE
FOR TENET HEALTHCARE TO $7.25 PER SHARE
OFFER WILL BE WITHDRAWN ON MAY 9 IF TENET DOES NOT ENGAGE
IN GOOD FAITH DISCUSSIONS
IN GOOD FAITH DISCUSSIONS
FRANKLIN, Tenn. (May 2, 2011) Community Health Systems, Inc. (NYSE: CYH) (CHS) today
announced that it has raised its all-cash offer to acquire all outstanding shares of common stock
of Tenet Healthcare Corporation (NYSE: THC) to $7.25 per share from $6.00 per share.
The increased offer is CHSs best and final offer based on information currently available to
CHS. If Tenet has not begun good-faith discussions with CHS by May 9 at 6:00 p.m. ET, the offer
will expire and CHS will withdraw its nominees for election to Tenets Board of Directors.
Wayne T. Smith, chairman, president and chief executive officer of CHS, said, We are making
this offer to bring this matter to a prompt conclusion in the best interests of all concerned. We
call on the Tenet Board to uphold its fiduciary duties and enter into good-faith discussions with
us to conclude a mutually beneficial transaction. Unless we see meaningful engagement by May 9, we
will withdraw the offer and move on to the many other compelling growth opportunities available to
us.
Each of Credit Suisse and Goldman Sachs has informed CHS that, subject to customary terms and
conditions, it is highly confident that financing for CHSs offer can be obtained in the capital
markets.
The $7.25 per share offer was made today in the following letter to the Tenet Board of
Directors:
Board of Directors
Tenet Healthcare Corporation
Attention: Trevor Fetter
1445 Ross Avenue
Dallas, Texas 75202
Tenet Healthcare Corporation
Attention: Trevor Fetter
1445 Ross Avenue
Dallas, Texas 75202
Ladies and Gentlemen:
Community Health Systems, Inc. (CHS) remains interested in acquiring Tenet Healthcare
Corporation (Tenet). We previously offered to acquire all of Tenets outstanding common
stock for $6.00 per share in cash. We are now increasing our offer to $7.25 per share in
cash. This offer provides your shareholders a 69% premium to the unaffected stock price
when we made public our initial proposal on December 9, 2010 and is our best and final offer
based on information currently available to us.
It is time to move beyond lawsuits and rhetoric.
However, if we have not seen meaningful
engagement by May 9, 2011 at 6:00 pm ET, we will withdraw our offer as well as our nominees
for election to your Board of Directors.
The offer remains subject to the conditions set forth in our letter of November 12, 2010.
Each of Credit Suisse and Goldman Sachs has informed CHS that, subject to customary terms
and conditions, it is highly confident that financing for this offer can be obtained in the
capital markets. Our financial advisors would be happy to meet with your advisors should
you have any concerns regarding our ability to finance this transaction or need additional
information.
We hope to hear from you soon and to begin a productive dialogue leading promptly to a
mutually beneficial transaction.
Sincerely,
Wayne T. Smith
Chairman of the Board, President and Chief Executive Officer
Chairman of the Board, President and Chief Executive Officer
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 was made in a letter to
Tenets Board of Directors on November 12, 2010, and rejected 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 Tenets 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. On April 18, 2011, CHS amended its offer to $6.00 per share in cash, which Tenet
rejected on April 22, 2011.
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.
About Community Health Systems, Inc.
Located in the Nashville, Tennessee, suburb of Franklin, Community Health Systems, Inc. is one of
the largest publicly traded hospital companies in the United States and a leading operator of
general acute care hospitals in non-urban and mid-size markets throughout the country. Through its
subsidiaries, the Company currently owns, leases or operates 130 hospitals in 29 states with an
aggregate of approximately 19,400 licensed beds. Its hospitals offer a broad range of inpatient and
surgical services, outpatient treatment and skilled nursing care. In addition, through its
subsidiary Quorum Health Resources, LLC, the Company provides management and consulting services to
approximately 150 independent non-affiliated general acute care hospitals located throughout the
United States.
Forward-Looking Statements
Any statements made in this news release that are not statements of historical fact, including
statements about our beliefs and expectations, including any benefits of the proposed acquisition
of Tenet Healthcare Corporation (Tenet), are forward-looking statements within the meaning of the
federal securities laws and should be evaluated as such. Forward-looking statements include
statements that may relate to our plans, objectives, strategies, goals, future events, future
revenues or performance, and other information that is not historical information. These
forward-looking statements may be identified by words such as anticipate, expect, suggest,
plan, believe, intend, estimate, target, project, could, should, may, will,
would, continue, forecast, and other similar expressions.
These forward-looking statements involve risks and uncertainties, and you should be aware that many
factors could cause actual results or events to differ materially from those expressed in the
forward-looking statements. Factors that may materially affect such forward-looking statements
include: our ability to successfully complete any proposed transaction or realize the anticipated
benefits of a transaction, our ability to obtain stockholder, antitrust, regulatory and other
approvals for any proposed transaction, or an inability to obtain them on the terms proposed or on
the anticipated schedule, and uncertainty of our expected financial performance following
completion of any proposed transaction and other risks and uncertainties referenced in our filings
with the Securities and Exchange Commission (the SEC). Forward-looking statements, like all
statements in this news release, speak only as of the date of this news release (unless another
date is indicated). We do not undertake any obligation to publicly update any forward-looking
statements, whether as a result of new information, future events, or otherwise.
Additional Information
This news release does not constitute an offer to sell or the solicitation of an offer to buy any
securities or a solicitation of any vote or approval. This news release relates to a business
combination transaction with Tenet proposed by CHS, which may become the subject of a registration
statement filed with the SEC. CHS intends to file a proxy statement with the SEC in connection
with Tenets 2011 annual meeting of shareholders. Any definitive proxy statement will be mailed to
shareholders of Tenet. This material is not a substitute for any prospectus, proxy statement or
any other document which CHS may file with the SEC in connection with the proposed transaction.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ ANY SUCH DOCUMENTS FILED WITH THE SEC CAREFULLY IN
THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED TRANSACTION. Such documents would be available free of charge through the web
site maintained by the SEC at www.sec.gov or by directing a request to Community Health Systems,
Inc. at 4000 Meridian Boulevard, Franklin, TN 37067, Attn: Investor Relations.
Participant Information
CHS and its directors, executive officers and nominees may be deemed to be participants in the
solicitation of proxies in connection with Tenets 2011 annual meeting of shareholders. The
directors of CHS are: Wayne T. Smith, W. Larry Cash, John A. Clerico, James S. Ely III, John A.
Fry, William N. Jennings, M.D., Julia B. North and H. Mitchell Watson, Jr. The executive officers
of CHS are: Wayne T. Smith, W. Larry Cash, David L. Miller, William S. Hussey, Michael T.
Portacci, Martin D. Smith, Thomas D. Miller, Rachel A. Seifert, and T. Mark Buford. The nominees
of CHS are: Thomas M. Boudreau, Duke K. Bristow, Ph.D., John E. Hornbeak, Curtis S. Lane, Douglas
E. Linton, Peter H. Rothschild, John A. Sedor, Steven J. Shulman, Daniel S. Van Riper, David J.
Wenstrup, James O. Egan, Jon Rotenstreich, Gary M. Stein and Larry D. Yost. CHS and its
subsidiaries beneficially owned approximately 420,000 shares of Tenet common stock as of January 7,
2011. Additional information regarding CHSs directors and executive officers is available in its
proxy statement for CHSs 2011 annual meeting of stockholders, which was filed with the SEC on
April 7, 2011. Other information regarding potential participants in such proxy solicitation and a
description of their direct and indirect interests, by security holdings or otherwise, will be
contained in the proxy statement that CHS intends to file with the SEC in connection with Tenets
2011 annual meeting of shareholders.
Media Contacts:
|
Investor Contacts: | |
Tomi Galin
|
W. Larry Cash | |
VP Corporate Communications
|
EVP & CFO | |
615-628-6607
|
615-465-7000 | |
George Sard/Brooke Gordon/Drew Brown
|
Lizbeth Schuler | |
Sard Verbinnen & Co
|
VP Investor Relations | |
212-687-8080
|
615-465-7000 |
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