Tenet unveils acquisition, buyback plans
Oct 1 (Reuters) - Tenet Healthcare Corp unveiled plans to accelerate growth through acquisitions and moved to boost shareholder value with buybacks and a reverse stock split.
Shares of the hospital operator rose as much as 8 percent to $6.74 in early trading on the New York Stock Exchange on Monday.
Tenet said it expects to spend about $400 million in cash on acquisitions to build its primary business, including acute care hospitals, outpatient facilities, and business process services.
Tenet also launched a new $500 million share buyback plan. If the latest buyback is completed, the company will have spent $1.2 billion in share repurchases in a little over two years, it said in a statement.
It also announced a reverse stock split, under which one new Tenet share will be issued in exchange for every four existing shares.
Other plans included borrowing $800 million in debt to repay some of its existing loans and to fund acquisitions.
Tenet shares have risen 22 percent this year as hospital chains are expected to benefit from President Barack Obama's healthcare law, which could lead to a massive influx of insured customers.
Shares of the company were up 5 percent at $6.58 in late morning trading.
(Reporting by Balaji Sridharan in Bangalore)
Keywords: TENET BUYBACK/