Community Health Systems Inc.,
one of the largest U.S. hospital companies, is exploring a deal after struggling to digest its acquisition of Health Management Associates, Inc.
The company announced “very preliminary” discussions with advisers before markets opened Monday, after Bloomberg reported on Friday that the company was exploring a possible sale.
Community Health Systems spokeswoman Tomi Galen declined an interview request.
The company said in a news release it had no timeline for its talks with advisers and “no certainty that the exploration will result in any kind of transaction.”
Shares of the Franklin, Tenn.-based company fell 1.6% in premarket trading after rising 16% at the end of last week on news of the possible sale. Community Health Systems shares have tumbled from a high of $64.04 in June 2015 to $12.29 at close on Friday as the company repeatedly failed to meet expectations in recent quarters.
Community Health Systems executives have said the turnaround of former HMA hospitals has been difficult. The company acquired HMA’s 71 hospitals in 2014, but has since pruned its portfolio with the spinoff of rural hospitals in Quorum Health Corp.
and the announced divestiture of another dozen hospitals.
The Community Health Systems deal for HMA was perhaps the most troubled of the hospital megamergers of recent years. Tenet Healthcare Corp.
acquired Vanguard Health Systems in 2013 and two nonprofit giants Trinity Health and Catholic Heath East merged the same year.
Susquehanna analysts said any buyer for Community Health Systems would have to overcome the company’s high leverage, but might see gains by divesting underperforming hospitals.
—Austen Hufford contributed to this article.
Write to Melanie Evans at Melanie.Evans@wsj.com
Article source: http://www.wsj.com/articles/community-health-systems-exploring-alternatives-1474288999