Franklin-based Community Health Systems Confirms Sale Talk

FRANKLIN, TN — Troubled Franklin-based hospital operator Community Health Systems confirmed Monday it is "exploring a variety of options with financial sponsors, as well as other potential alternatives," but said there's no timetable for a deal or even any guarantee one will happen.

CHS operates or leases 158 hospitals in 22 states with 223,000 employees and its stock has slid from $50 per share last year to $10. There was a rebound when Bloomberg broke the news of a potential sale Friday, the stock jumping 15 percent in the final 10 minutes of trading to close at $12.29.

The combination of the waning impact of health-insurance reform on hospitals and troubles with integrating Health Management Associates, which CHS bought two years ago, have hammered CHS. CHS lost $112 million in the initial integration period after buying HMA. Last month, CHS reported a second-quarter lost of more than $1.4 biollion

The Bloomberg report noted that a roadblock to any sale is CHS' massive $15 billion debt load. CHS is selling at least a dozen of their properties and has already spun out 38 facilities into Quorum Health Corp. Analysts think its unlikely another hospital operator, such as Nashville-based HCA or Tenet, will buy CHS outright, though a partial sale is possible. Another option is for the company to go private.

"Community Health Systems' primary focus continues to be on delivering high-quality health services in the communities where we operate," Chairman and CEO Wayne Smith told the NashvillePost. "Our management team is completely committed to efforts that advance clinical excellence, operational and financial performance and growth strategies that will benefit our organization and the customers we serve."

CHS shares were trading at $11.70 at 10 a.m. Monday after hitting a high of $12.20 earlier in the day.

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