DOW JONES NEWSWIRES
Tenet Healthcare Corp. (THC) plans to sell $300 million of
mandatory convertible preferred stock and will use the proceeds to
repurchase its outstanding senior notes.
Shares fell 2.1%, to $5.73 in after-hours trading. The stock has
climbed fivefold this year, but is still down about 7% from a year
ago.
The offering will consist of 300,000 shares. Unless converted
earlier at the option of the holder or the company, the stock will
convert automatically into a variable number of common shares on
Oct. 1, 2012. The conversion rates, dividend rate and other terms
will be determined by negotiations between the company and the
underwriters.
In July, the hospital operator bought back $68 million in debt
from the open market, spending $60 million in cash.
Last month, Tenet raised its 2009 earnings forecast as it
reported stronger-than-expected interim results for the current
quarter. The company, which has been battling falling admissions,
noted better-than-expected trends in payer and patient mix,
bad-debt expense and volume growth.
The hospital industry has been facing growing numbers of
uninsured patients and unpaid patient bills as unemployment
climbs.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
Kathy.Shwiff@dowjones.com