On Wednesday, Health Management Associates Inc issued a statement that said its board of directors had given its approval for the takeover proposal by Community Health Systems Inc. The acute care hospitals operator said its board had settled for Community Health to pay a combination of stock and cash.
Health Management, with headquarters situated in Naples, Florida, operates and manages hospitals and ambulatory surgery centers in several larger markets in urban regions and small cities. The firm operates 71 hospitals in 15 US states with a combined number of licensed beds at 11,000. One of the hospitals is the 208-bed Charlotte Regional Medical Center located in Punta Gorda, Florida.
Community Health is a Fortune 500 company based out of Franklin, Tennessee. It is considered as the US' largest non-urban provider of general hospital healthcare services.
Community Health, said Health Management, would be paying the latter USD10.50 in cash per share of Health Management share. Community Health would also be handing ot 0.06942 share of its common stock aside from the cash per Health Management. The exchange would value Health Management's shares at USD13.44 apiece plus USD1.00 contingent value.
Although the deal was announced previously in August by a different set of board directors, Community Health saw its expected value decline from an estimated uSD3.9 billion to USD3.6 billion plus contingent value. Health Management replaced its board courtesy of shareholders in October with new directors that Glenview had nominated. Shares of Health Management, on the other hand, had traded and closed on Tuesday at USD2.52 per share.
The proposed consolidation of the two companies was delayed due to a suggestion of activist investor Glenview Capital for Health Management's board to review the proposal. Glenview owns 14.5% of the hospital operator and its the latter's largest shareholder. Glenview indicated a review should be done as UBS Securities and Lazard Freres & Co conducted a fairness openion regarding the deal for Health Management's perusal.
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