Community Health Systems’ Bid for Tenet Healthcare Denied, Both Stocks Still Rise

Two hot stocks on trading radars this morning are Community Health Systems (NYSE:CYH) and Tenet Healthcare (NYSE:THC). Community Health Systems offered to buy Tenet Healthcare for $6 per share. Tenet was not happy with the bid and rejected it. In light of the news today, CYH shares are trading up 17%, or over $37 per share, while THC shares are trading up 54%, or at $6.62 per share.

What is so appealing about Tenet Healthcare as an acquisition target for Community Health Systems? Here are a few notable stats:

THC carries $400 million in cash on its balance sheet, or $.82 per share.

THC generates over $18 in revenue per share, or over $9 billion in revenue.

THC operates 49 hospitals with 13,430 beds and employs over 43,000 people.

-In the most recent THC quarterly report, inpatient revenue dropped 2.5% to $1.43 billion and outpatient revenue rose 3.5% to $734 million.

-The downside is THC also holds over $4 billion in debt.

-THC is based in Dallas, TX while CYH is based in Franklin, TN.

Tenet said its board rejected the offer because it would provide “growth potential inherent in Tenet to Community Health without adequately compensating Tenet shareholders.”
Disclosure: No position.