No Buyers for All of Tenet, Analysts Say


Wall Street analysts don’t expect Tenet Healthcare Corp. (THC – Get Report) to be swallowed whole in a blockbuster deal, despite buzz generated by a Wall Street Journal report late Wednesday, Sept. 13, that the activist-pressured hospital operator was exploring strategic options, including a sale of the company.

Tenet shares were up 5.6%, or 91 cents, to $17.15 through late morning trading Thursday.

Jason Gurda of KeyBanc Capital Markets said a more likely scenario for Tenet is to divest individual hospitals to various buyers as Community Health Systems Inc. (CYH – Get Report) has done and possibly to shed a major subsidiary.

“We believe it is unlikely [Tenet] will find a buyer for the whole company due to THC’s high level of debt and the likely lack of interest from potential strategic buyers,” Gurda wrote in a note Thursday morning.

He added that with an enterprise value of more than $16 billion, only HCA Healthcare Inc. (HCA – Get Report) and maybe Universal Health Services Inc. (UHS) are the only rival hospital operators capable of carrying out an acquisition of Tenet but doubted either would be interested.


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