Community Health Systems, Inc. Adopts a Short-Term Stockholder Protection Rights Agreement
The discussions are at a very preliminary stage and there is no timeline established for this review. There can be no certainty that the exploration will result in any kind of transaction. The Company does not expect to make further public comment regarding these matters while this exploration takes place.
Under the terms of the Rights Agreement, until the earlier of (i) the
Company’s announcing that a person or group has acquired 15% or more of
the Company’s common stock (an “Acquiring Person”) or the date and time
on which any Acquiring Person has acquired more than 40% of the
Company’s common stock (in either case, the “Flip-in Date”) and (ii) the
tenth business day, or such later date designated by the Board, after
any person or group commences a tender offer that will result in such
person or group owning 15% or more of the Company’s common stock, the
Rights will be evidenced by the common stock certificates, will
automatically trade with the common stock and will not be exercisable.
Thereafter, separate Rights certificates will be distributed and each
Right will entitle its holder to purchase fractions of Participating
Preferred Stock having economic and voting terms similar to those of one
share of common stock for an exercise price of
Upon the occurrence of the Flip-in Date, each Right (other than Rights beneficially owned by any Acquiring Person or transferees thereof, which Rights become void) will entitle its holder to purchase, for the exercise price, a number of shares of the Company’s common stock having a market value of twice the exercise price. Also, if after an Acquiring Person controls the Company’s Board of Directors or is the owner of 50% or more of the Company’s common stock, the Company is involved in a merger or sells more than 50% of its assets or earning power and, in the case of a merger, the Acquiring Person will receive different treatment than all other stockholders or the transaction is with the Acquiring Person, each Right will entitle its holder to purchase, for the exercise price, a number of shares of common stock of the Acquiring Person having a market value of twice the exercise price. If any person or group acquires between 15% and 50% of the Company’s common stock, the Board of Directors may, at its option, exchange one share of the Company’s common stock for each Right.
The Rights may generally be redeemed by the Board of Directors for
Smith stated, “The issuance of the Rights has no dilutive effect, will not affect reported earnings per share, is not taxable to the Company or its stockholders, does not affect our debt instruments, and will not change the way in which our shares are traded.”
A letter regarding the Rights Agreement and a Summary of certain terms of the Rights Agreement will be mailed to the stockholders of the Company.
Statements contained in this news release regarding potential
transactions, operating results, and other events are forward-looking
statements that involve risk and uncertainties. Actual future events or
results may differ materially from these statements. Readers are
referred to the documents filed by
Community Health Systems, Inc.
W. Larry Cash, 615-465-7000
President of Financial Services and Chief Financial Officer
Tomi Galin, 615-628-6607
Senior Vice President, Corporate Communications, Marketing and Public Affairs