What You Need to Know About the Tenet Healthcare Sale

Health and Healthcare

Published: September 14, 2017 10:35 am

Last Updated: January 12, 2020 8:11 am

Tenet Healthcare Corp. (NYSE: THC) watched its shares make a handy gain early on Thursday after The Wall Street Journal announced that it was exploring the possibility of a sale. According to the report, Tenet is taking on financial advisors to look at a range of options and arrange meetings with potential buyers.

Prior to the stock jumping on Thursday, the market cap was roughly $1.6 billion, but this might not be an accurate price target. The company has a massive amount of debt, about $15 million. At the same time, Tenet posted revenues of $19.62 billion in the past year, which gives it an enterprise value of roughly $20 billion.

A few suitors that come to mind include HCA Healthcare Inc. (NYSE: HCA), Community Health Systems Inc. (NYSE: CYH) or even UnitedHealth Group Inc. (NYSE: UNH).

Tenet currently operates 77 acute-care hospitals, 21 short-stay hospitals and over 460 outpatient centers.

It is worth pointing out that these sales talks are coming just two weeks after Tenet’s CEO Trevor Fetter announced that he would be stepping down in March 2018. Fetter had been with the company since 1995 and has acted as CEO since 2003.

Problems with the company also have led to the resignation of two Tenet board members from Glenview Capital Management, Tenet’s largest shareholder at 17.74%, as of the end of June 2017.

ALSO READ: Merrill Lynch Top Health Care Stock Picks for September: Focus on Large Cap Biotech

Shares of Tenet were last seen up about 3.6% at $16.82, with a consensus analyst price target of $19.71 and a 52-week range of $12.54 to $24.13.

HCA shares were trading at $79.04, with a 52-week range of $67.00 to $91.03 and a consensus price target of $94.39.

Community Health Systems traded at $7.45. The stock has a 52-week range of $4.15 to $13.28 and a consensus price target of $7.17.

UnitedHealth shares were last seen at $197.69, with a consensus price target of $210.56 and a 52-week range of $132.88 to $200.76.

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