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Community Health Systems Makes Bid For Tenet

Community Health Systems Makes Bid For Tenet - Community Health Systems Inc (CYH.N) has offered to buy Tenet Healthcare Corp (THC.N) for $3.3 billion and create the country's largest hospital chain, but Tenet has rejected its larger rival's unsolicited bid.

Shares in Tenet soared nearly 50 percent in extended trade. Including debt, the deal is valued at some $7.3 billion, Community Healthcare said in a statement.

Analysts say the largest U.S. hospital operators are struggling to contain costs and mounting piles of bad debt, and have been hit by a stalled economy and stubbornly high unemployment levels. Some had speculated that delays in healthcare reform would trigger a rash of acquisition activity in the sector.

Community Health Systems Makes Bid For Tenet

The country's largest publicly traded hospital operator is offering $5.00 a share in cash and $1.00 per share in common stock for Tenet, whose hospitals are located primarily in the southern and western United States.

That offer represented a 40-percent premium over Tenet's Thursday closing price, it said.

If it goes through, the deal would create a company with $22 billion in annual revenue, owning or operating 176 hospitals in 30 U.S. states.

Tenet has 49 acute-care hospitals in 11 states, 59 outpatient service centers, 57,613 employees and had $9 billion in net operating revenue in 2009. Community Health Systems had first approached Tenet on Nov. 12 but the smaller company rejected its suitor's advances on Dec. 6.

That prompted the bidder to re-submit an offer on Thursday.

Shares in Tenet soared 47 percent to $6.32 in after-hours trade, from a regular-session close of $4.29.

Community Health Systems Makes Bid For Tenet
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