Community Health Systems Inc. on Monday said it has adopted a ‘poison pill,’ two weeks after it said it is exploring a deal and as a Chinese billionaire has been building a stake in the company, according to the Wall Street Journal.
Tianqiao Chen recently increased his holding to 9.9 percent of Community Health shares, according to a recent filing, WSJ said.
Late last month, Community Health Systems said it was exploring a deal after struggling to digest its acquisition of Health Management Associates Inc., the Journal reported.
Locally, the company owns Deaconess and Valley hospitals and Rockwood Clinic, which operate as Rockwood Health System and employ more than 3,600 people.
The Journal reported Monday that Chief Executive Wayne Smith said the board is exploring a “variety of options” with private-equity sponsors “as well as other potential alternatives that would benefit all stockholders of the company.”
He said the company adopted a stockholder protection rights agreement for six months “in light of the recent accumulation of a significant block of the company’s common stock” to prevent someone from buying a potentially controlling block before the company is finished reviewing its options, the Journal reported, adding that Smith said the rights agreement “is not intended to and will not prevent a transaction involving the company’s stock at a full and fair price.”
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