CHS is exploring its options – could a sale be on the horizon?
- Community Health Systems is now in talks with advisors to explore its options, including a potential sale.
- CHS has been fighting to improve its profit margins by attempting to sell several of its hospitals.
- There was no timeline provided for the review process as "discussions are at a very preliminary stage," according to a company statement.
"There can be no certainty that the exploration will result in any kind of transaction," said CHS, which is one of the nation's largest publicly traded hospital chains with 158 affiliated hospitals in 22 states.
In June, CHS said it was going to divest ten hospitals for about $530 million and 20 more hospitals by the end of 2017. At this time the company had 160 acute care hospitals. Its plan was to focus on improving the services it provides in the areas where it has multiple hospitals. This business strategy appears to have been unsuccessful.
Earlier this month, Chief Financial Officer Larry Cash said the company would likely sell more hospitals than the 12 that were already up for sale. The hospitals that are planned to be sold were not identified. The sales may have been CHS' last attempt at keeping business afloat because despite these efforts, it is still questioning whether the time has come to sell itself in its entirety.
On Monday, Modern Healthcare reported that Apollo Global Management was speaking with the hospital chain to acquire some assets.
Following the rumors that came out Friday about CHS' sale, the company's stock price increased. However, on Monday its stock dropped to $11.08 at end of business, down from $12.07 at the open of business. As of 9:40am today, the stock dropped further to $10.62 per share cost.
- Nasdaq Community Health Systems in Preliminary Discussions
- Healthcare Dive CHS to unload up to 30 hospitals, focus on regional hubs
- Healthcare Dive CHS anticipates putting more hospitals on the block
- Modern Healthcare CHS confirms it is exploring a sale
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