Last month, there had been a growing speculation regarding the possible takeover of Health Management Associates Inc (NYSE:HMA) after its CEO Gary Newsome decided to retire by the end of July. Since then, several companies became interested to acquire the hospital operator including Community Health Systems, according to report from Reuters citing sources familiar with the issue.
HCA Holdings Inc (NYSE:HCA) and LifePoint Hospitals, Inc. (NASDAQ:LPNT) were also identified as potential buyers. The sources who requested anonymity due to the privacy of the matter said that the two hospital chains have been looking to establish possible transactions.
Some of the sources suggested that Community Health Systems could be the most likely buyer. One of the executives of the company previously stated that it is interested to make another take over. In 2007, Community Health Systems acquired Triad Hospitals for $6.8 billion.
Health Management Associates’ Board Of Directors Urged To Remove Poison Pill
Glenview Capital, the largest shareholder of Health Management Associates Inc (NYSE:HMA) urged the board of directors of the hospital operator to amend or remove its shareholder rights plan or poison pill intended to prevent a hostile takeover. The hedge fund’s move stirred the takeover speculations despite its statement that it had no intentions to control the hospital operator.
In addition, it was also reported that Health Management Associates Inc (NYSE:HMA) engaged the services of financial advisers to explore alternative strategies. Some analysts believe that its chairman, William Schoen doesn’t want to sell the hospital operator.
Health Management’s Stock Price Surged
The stock price of Health Management Associates Inc (NYSE:HMA) surged by more than 8 percent to $16.75 per share on Tuesday on reports that several companies are interested to buy it.
The stock value of LifePoint Hospitals, Inc. (NASDAQ:LPNT) went up by more than 3 percent to $49.64 per share and the shares of HCA Holdings Inc (NYSE:HCA) also traded slightly higher around $36.87 per share.
Reuters noted that since that enactment of the Patient Protection and Affordable Care Act also known as Obama Care in 2010, many hospitals have been consolidating. Data from Thomson Reuters showed that there had been 650 transactions for hospitals in an effort to prevent the increase of costs and lower reimbursement fees from the government.
Last month, Tenet Healthcare Corp (NYSE:THC) revealed its agreement to purchase Vanguard Health Systems, Inc. (NYSE:VHS) for $1.73 billion.