(Adds Tenet Healthcare comment in the sixth paragraph)
DOW JONES NEWSWIRES
Community Health Systems Inc. (CYH) filed a motion in a court in
Texas to dismiss the lawsuit brought against it by Tenet Healthcare
Corp. (THC).
Tenet had filed the suit last week, accusing Community Health of
boosting its financial performance for years by unnecessarily
converting emergency-room visits into more-lucrative inpatient
admissions.
Community Health on Monday revised its bid to all-cash, which
"renders Tenet's irresponsible and inaccurate lawsuit irrelevant to
our offer," Wayne T. Smith, Community Health's chairman, president
and chief executive, said at the time.
On Tuesday, Community Health said it had moved to dismiss the
"baseless" lawsuit Tenet had brought, "in advance of even being
served with Tenet's lawsuit."
The all-cash offer "eliminates any basis for a federal
securities lawsuit," Community Health said in a statement. "Now
that the offer is all cash, and the stock component has been
eliminated, so has Tenet's pretext for alleging a securities law
violation. For this reason alone, Tenet's claim must be
dismissed."
In response, a Tenet spokesperson said "This changes nothing. We
intend to vigorously prosecute our claims."
Community Health's current bid for Tenet is $6 a share,
replacing its previous offer of $5 a share and $1 in stock, which
Tenet rejected in December. Tenet has said its board is reviewing
the revised offer and stressed that the latest offer is for the
same price as the previous offer, "which grossly undervalued Tenet
and wasn't in the best interests of Tenet or its shareholders."
Shares of Community Health were recently down 0.9% to $30.92
after hours, while Tenet shares closed at $6.64 and were inactive
in after hours trade.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855;
nathan.becker@dowjones.com