Health Management Associates

Tenet seen still in play, even after lawsuit

By Susan KellyCHICAGO (Reuters) - Tenet Healthcare Corp <THC.

N> shares retained a takeover premium on Tuesday, a day after it lobbed a legal grenade at unwanted suitor Community Health Systems <CYH.N>, suggesting that investors still believe a deal between the two rivals could happen.Tenet on Monday filed an explosive lawsuit against Community Health, accusing the No. 2 U.S. hospital operator of inflating patient admissions and overbilling the Medicare program and other payers to boost revenue and profit. Community Health has denied the charges.The unusual accusations damaged shares of both companies, with Community Health plunging 36 percent and Tenet sinking 15 percent, as investors assessed that Tenet's analysis of its rival's admissions practices would not be easy to dismiss and could trigger a government probe.Shares of Tenet, the No. 3 hospital operator, closed at $6.56 on Tuesday, still well above Community Health's November offer of $6 a share.Community Health shares also rebou...

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