Community Health Systems Inc.'s (CYH) rejected bid for Tenet Healthcare Corp. (THC) grew more hostile Friday when, as expected, Community announced a full slate of 10 director nominees to Tenet's board.
The major hospital operators have openly scraped since December, when Tenet rejected Community's $6-a-share, $3.3 billion bid and Community disclosed the offer to the public.
To defend against the acquisition, Tenet last week adopted a shareholder-rights plan that could dilute the holdings of someone acquiring 4.9% of common stock, and said it changed its bylaws so the 2011 stockholders meeting could be delayed roughly six months until November.
This week Tenet held a lengthy conference call with investors, seeking to show that the bid doesn't reflect its "compelling growth prospects." Several analysts have raised their valuations on Tenet shares, with price targets ranging from $6.50 to $9.
In a release Friday, Community said it had notified Tenet of the independent-director slate to be nominated for election at the shareholder meeting.
"By just saying 'no' to our 40% premium offer, installing a poison pill...and delaying the 2011 annual meeting for six months...Tenet's highly paid board has clearly demonstrated its entrenchment. Tenet shareholders deserve better," Community Health Chairman and Chief Executive Wayne Smith said in a statement.
Tenet said Community nominated its slate "only to advance its goal of acquiring Tenet at an inadequate price. We are confident that the continued execution of our strategic plan will deliver significantly more value to our stockholders than Community Health's inadequate proposal."
Tenet noted that nine of its 10 directors are independent, and all the directors are elected annually.
Copyright © 2011 Dow Jones Newswires