Tennova Healthcare parent company buyout plan announced

Tennova Healthcare parent company buyout plan announced

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FRANKILN (AP/WATE) - Community Health Systems plans to buy fellow hospital operator Health Management Associates for about $3.9 billion.

Health Management Associates is the parent company of Tennova Healthcare, which operates several healthcare facilities in East Tennessee, including hospitals in Knoxville, Jefferson City, LaFollette and Newport.

Community Health Systems says the deal will leave the company well positioned to benefit from the health care overhaul.

The Franklin, Tenn., company says it will pay a combination of cash and stock valued at $13.78 for each share of Health Management Associates Inc., or HMA.

That represents a drop of more than 7 percent from HMA's closing price Monday of $14.92.

HMA shares fell 5.3 percent, or 79 cents, to $14.13 in pre-market trading.

The board members of both companies have approved the deal, but HMA stockholders still have to clear it.

The health care overhaul is expected to help hospitals as it expands insurance coverage to millions of people over the next few years.

Tennova was the name give to Mercy Health Partners when it was purchased by HMA in October 2011. Mercy Health Partners was formed with the merger of Baptist Health System and Mercy Health System in August 2007

A series of consolidations, liquidations and layoffs followed, which included the closing of Baptist Hospital, a large facility on the south side of the Tennessee River in Knoxville, and St. Mary's Hospital Scott County, the only hospital operating in that county.

Mercy Health Partners initially planned to build a new hospital in downtown Knoxville, but after Tennova's takeover plans shifted to a new hospital on Middlebrook Pike.

It is unclear how the latest ownership takeover will affect plans for a new hospital.

Portions of this report Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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