So, Tenet, what really got you kicked off the playground?

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TenetOver the last few months, U.S. hospital giant Tenet Healthcare was hot to buy the second-biggest hospital operator in Australia.  While the acquisition of Healthscope Ltd. would have saddled Tenet with third-world-like debt levels — oh wait, it has them already! — the company argued that it could turn a profit on the Australian chain and improve its margins too.

The thing is, Tenet seems to have been spurned even before buying the veil, much less marching up the aisle. In early June, Tenet pulled out, announcing that it hadn’t had time to “convey to shareholders the potential value, including the inherent risks and opportunities,” of the deal.  In other words, Healthscope blew them off.

The reason, guys?   I’m guessing Healthscope liked seeing TPG-Carlyle party (now awaiting approval to close the deal) drive up in its silver Benz. While TPG-Carlyle may have barely cut ahead of  KKR’s party when it rolled up in its stretch Hummer, your heavily leveraged Kia didn’t do the trick.  In fact, no U.S. chain may be in a position to satisfy comfortably-situated bad boys like Healthscope.  You’re hospital chain 1.0;  private equity, like it or not, may be the next gen. Pretty frustrating, huh?

OK, maybe I have an overly imaginative mind, but I envision the U.S. hospital chain’s SWAT due diligence team finding people out to lunch and managers pointedly discussing the Sox when they wanted to go over the books.

Bottom line: I don’t think it’s Blackrock and KKR and TPG-Carlyle, honestly.  I’m sorry, Tenet, but they’re just not that into you.

Oh, and by the way?  I’d be on high alert if I were you.  You’re definitely on thin ice if you can’y skim some of the cream off of emerging foreign markets — and this isn’t a good sign.

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