THC Tenet Healthcare Corporation New

By Dana Mattioli and Dana Cimilluca 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (September 14, 2017).

Tenet Healthcare Corp., facing shareholder-activist pressure, is exploring strategic options including a possible sale of the hospital company, according to people familiar with the matter.

Tenet is working with investment banks Lazard and Barclays PLC on a range of options and has started to arrange meetings with possible buyers, the people said.

Tenet, one of the largest for-profit hospital chains in the U.S., had a market value of $1.6 billion before The Wall Street Journal reported the news Wednesday, and more than $15 billion in debt, giving it a so-called enterprise value of nearly $20 billion. It had $19.6 billion in revenue last year and about 130,000 employees.

In part because of the size of Tenet's debt, the universe of buyers for the whole company is small, some of the people said.

Tenet, which operates more than 500 hospitals and outpatient centers in the U.S., has been hurt by uncertainty over the fate of Medicaid programs and insurance exchanges under the Affordable Care Act, as have other health-care companies. Over the past year, the company's stock had fallen by about 30%.

In August, Tenet said Chief Executive Trevor Fetter would step down in March if not sooner.

The announcement followed a board shake-up earlier that month, with the resignation of two officials from Glenview Capital Management LLC. Their departures started a countdown to end a standstill agreement between the hospital operator and Glenview -- the activist investor and Tenet's largest institutional shareholder -- which has pushed the company for a sale or new leadership.

Tenet shares shot up after hours on the news, reversing a decline of 5.3% during regular trading.

U.S. hospital companies suffered an unexpected slump in volume in the second quarter and Tenet fared poorly. The company's same-facility admissions were down 2.2% year-over-year compared with a 0.3% average decline across publicly traded rivals, according to data from RBC Capital Markets.

Tenet has invested heavily to expand outside of hospitals since its 2015 partial acquisition of United Surgical Partners International Inc.

--Melanie Evans contributed to this article.

Write to Dana Mattioli at dana.mattioli@wsj.com and Dana Cimilluca at dana.cimilluca@wsj.com

(END) Dow Jones Newswires

September 14, 2017 15:40 ET (19:40 GMT)

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