* Community has made $3.3 bln bid for Tenet
* Tenet 10-member board elected annually
* No date set yet for 2011 annual meeting
* Tenet slips 6 cents to $6.68, still above $6/share offer
* Community Health shares fall 1 percent (Adds analyst comment)
By Lewis Krauskopf
NEW YORK, Dec 20 (Reuters) - Community Health Systems Inc said it would nominate directors at the 2011 annual meeting of Tenet Healthcare Corp, ratcheting up the pressure behind its $3.3 billion bid for the rival hospital chain.
Community Health went public earlier this month with its unsolicited $6-a-share bid for Tenet, which rejected the offer as opportunistic. Tenet shares immediately soared above the offer price. They were at $6.68 on Monday, down 6 cents in afternoon trading. Community's shares fell 1 percent to $36.31.
It is "unfortunate" that Tenet's board has refused to discuss the offer, Community Health Chief Executive Officer Wayne Smith said in a statement on Monday, announcing the plans to propose the board slate.
"We believe Tenet shareholders would be best served by a board focused on maximizing shareholder value, and we intend to propose directors who will look out for the interests of Tenet shareholders," Smith said.
Tenet, whose 10-member is board elected annually, said it had yet to schedule its 2011 annual meeting.
Community is nominating directors "solely to help advance its inadequate and opportunistic proposal," Tenet said in a response. "Tenet shareholders -- not Community Health -- deserve to benefit from Tenet's growth."
Susquehanna Financial Group analyst A.J. Rice said Tenet is required to hold its next shareholder meeting by July 29, 2011, at the latest. Community must nominate its proposed slate between Jan. 5 and Feb. 4, according to Rice.
Given Community's aggressive moves, Rice said, Tenet may be forced to review strategic alternatives. He noted that 400 million Tenet shares -- or about 80 percent of shares outstanding -- have traded since Community announced its offer on Dec 9.
"Many of these shareholders are likely playing for 'an event' and will be difficult to satisfy with a long-term plan for improved shareholder value," Rice said in a research note.
RAISED BID?
Community has said the merged entity would operate more hospitals in the United States than any other company.
The offer -- which includes $5 per share in cash and $1 per share in stock -- represented a 40 percent premium to where Tenet shares had closed before the bid was announced. Including debt, Community valued its offer at about $7.3 billion.
Tenet shares traded above $6 as recently as May. They came under pressure after it was revealed the company was interested in an Australian hospital chain -- raising questions about Tenet's domestic prospects -- and the company issued disappointing third-quarter results.
Shares of Dallas-based Tenet traded above $50 earlier in the decade, but declined after a series of financial and other setbacks.
Analysts have predicted that Community would raise its bid and that other bidders, including possibly private equity firms or rival hospital companies, could enter the fray.
Leerink Swann analyst Jason Gurda said earlier on Monday that Tenet's response to Community Health's bid was "so hostile" that it would "have a hard time agreeing to even a modestly higher price."
"We believe further upside in Tenet shares is likely over the next few months as Community Health proceeds with its take-over attempt," Gurda said in a research note reiterating his outperform rating on Tenet shares. (Reporting by Lewis Krauskopf; Editing by Dave Zimmerman and Maureen Bavdek)