A new bidder apparently has won the war for Triad Hospitals Inc., announcing a bid that totals nearly $7 billion.
Community Health Systems Inc., a Franklin, Tenn-based company that owns or operates 77 hospitals in 22 states, bid $54 per share in cash for Triad, or a total of $5.1 billion. Community Health also will be assuming $1.7 billion in Triad debt, making the total value of the transaction $6.8 billion.
The bid was accepted by Triad Hospitals' board of directors on the recommendation of a special committee.
In February, Triad Hospitals accepted a buyout offer from two private equity firms - JP Morgan Chase's CCMP Capital Advisors and Goldman Sachs Capital Partners. That offer, for $50.25 per share or a total of $4.7 billion, contained a provision that enabled Triad to entertain other offers for a buyout for 40 days, said Sheryl Skolnick, senior vice president of CRT Captial.
At the time the original offer for Triad was announced, Skolnick listed Community Health as a possible acquisition target. After the Triad deal was announced, Community Health's stock price fell to $33.79 a share, a drop of $3 a share, or 8 percent from the opening price on Monday, March 19, the day the deal was announced.
Community Health's stock price dropped to a low of $33.32 on Tuesday before recovering slightly to $34.11 at midday Wednesday.
Triad's shares shot up from $49.36 at the close of trading Friday, March 16, to $51 per share at midday Monday.
When the original Triad deal was announced, Skolnick said the $50.25 per share offer at that time was "fairly valued, but it's not the highest valuation you could come up with." Triad paid a minimal termination fee to the original group of bidders.
Community announced that the acquisition would make the resulting company the largest publicly traded hospital company in the U.S., owning and operating 130 hospitals in 28 states, with a total bed count of more than 18,700.
HCA Inc., Nashville, Tenn., had been the largest publicly owned company in the field with 172 hospitals, but the company was taken private in a leveraged buyout that closed in December.
The acquisition is subject to certain closing conditions, including approval by Triad stockholders, antitrust clearance and other regulatory approvals.