Tenet Bids $465 Million for Allegheny Hospitals

Tenet Healthcare Corp. bid $465 million to buy eight hospitals from Allegheny Health Education & Research Foundation, pitting it against smaller Vanguard Health Systems Inc. in a battle to become one of Philadelphia’s largest hospital operators. Pittsburgh-based Allegheny Health is selling the Philadelphia-area hospitals as part of a court-supervised bankruptcy reorganization. Closely held Vanguard previously offered to pay $460 million for the hospitals, plus an additional $80 million if their earnings meet certain projections. Santa Barbara-based Tenet, the No. 2 U.S. hospital operator, has boosted revenue and profit by buying groups of hospitals in major urban areas such as Southern California and Florida, then cutting costs by sharing resources. U.S. Bankruptcy Judge Bruce McCullough is expected to consider all offers for the hospitals in the next 30 to 45 days. Tenet shares fell 13 cents to close at $26.38 on the New York Stock Exchange. The company disclosed the bid after the close of U.S. stock markets.