Community Health Systems Inc. said Thursday evening Tenet Healthcare Corp. rejected its $7.3 billion takeover bid, possibly nixing the creation of what could have been the largest hospital chain in the country.

Tenet's stock soared amid speculation it would receive another buyout offer, rising 51 percent in morning trading to reach $6.49 per share. Community Health's stock also rose 7.4 percent to reach $33.97 a share.

The 126-hospital Community Health of Franklin, Tenn. is offering $3.3 billion in cash and stocks, along with the assumption of $4 billion of the Dallas-based Tenet's debts.

Tenet sniffed at the proposal, which Community Health says offers $6 per share, a 40 percent premium on Tenet's Thursday $4.29 closing price, calling it "opportunistic" and saying it undervalues the company's worth. And in a letter to Community Health president and CEO Wayne T. Smith, the 50-hospital group said Community Health was unprepared to run its hospitals.

"You operate small hospitals; we operate large hospitals. Fewer than one sixth of your hospitals are as large as our average hospital. You operate in rural or suburban markets; we operate primarily in urban markets. We operate four academic medical centers; you operate none," the letter read.

But health care investment bank Leerink Swann speculated that Community Health could get Tenet for $7 per share.

"We believe Community Health would most likely be willing to raise its offer and that frustrated Tenet shareholders are likely to accept a deal," an analyst said in a note, according to Reuters.

If successful, the deal would have created a health chain leviathan, with 126 hospitals in 29 states, for a total of 32,830 beds, Community Health said. The combined pro forma revenue would be $22 billion.

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