Blue Cross of California public benefit plan approved by WellPoint stockholders; $3 billion to go to charitable foundations.WOODLAND HILLS, Calif.--(BUSINESS WIRE)--May 8, 1996-- Blue Cross of California (BCC (Blind Carbon Copy) The field in an e-mail header that names additional recipients for the message. It is similar to carbon copy (cc), but the names do not appear in the recipient's message. Not all e-mail systems support the bcc feature. See fcc. ) Wednesday announced that BCC and the public stockholders of its subsidiary, WellPoint Health Networks Inc. (NYSE NYSE See: New York Stock Exchange :WLP WLP WebLogic Portal (Bea Systems) WLP Wafer Level Packaging WLP Women's Learning Partnership (Bethesda, MD) WLP Workplace Learning & Performance WLP World Library Partnership, Inc. ), approved a recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. and reorganization plan A scheme authorized by federal law and promulgated by the president whereby he or she alters the structure of federal agencies to promote government efficiency and economy through a transfer, consolidation, coordination, authorization, or abolition of functions. under which all of BCC's assets, valued at approximately $3 billion, will be contributed to two new charitable foundations. When the transaction is completed later this month, it will result in the largest health-related charitable donation in California history. ``Through the funding of these foundations we look forward to creating a lasting legacy for the people of California,'' said Leonard D. Schaeffer, BCC chairman and chief executive officer. ``We are nearing our goal of creating a permanent vehicle for carrying out the Blue Cross mission to promote improvements in the health status of Californians.'' Schaeffer said the creation of the foundations is a testament to the hard work and dedication of the people of Blue Cross of California. ``Nine years ago the tangible net worth Tangible Net Worth Total assets less intangible assets and total liabilities. Notes: In terms of a consumer, tangible net worth is the sum of all your tangible assets (cash, home, cars, etc). of Blue Cross of California was less than $10 million,'' he said. ``Today, the company's major asset, WellPoint Health Networks, has a market value of over $3.4 billion. This didn't just happen. It is the result of a tremendous amount of hard work by our board of directors, employees, providers and agents and brokers.'' ``The foundations,'' he continued, ``whose mission will be to expand access to affordable health care for underserved communities and individuals, as well as to promote fundamental improvements in the health status of the people of California, are a fitting legacy to the people of Blue Cross of California. ``Their contributions, through these public benefit trusts, will go on helping the people of the state of California long after all of us are gone.'' Under the recapitalization: -- BCC, WellPoint's largest shareholder, will receive a total of more than $1 billion in cash, consisting of $800 million received as a cash dividend from WellPoint and approximately $235 million from the sale of BCC's commercial assets to WellPoint; -- WellPoint will be merged into BCC following BCC's conversion to for-profit status; -- Pursuant to the merger, WellPoint shareholders will receive 0.667 shares of new WellPoint stock for each share of existing WellPoint stock which they currently hold; -- BCC, which currently owns more than 80 million WellPoint shares will receive and transfer to the charitable foundations both the cash and 53.4 million shares or 80.4 percent of the outstanding equity of the new WellPoint entity; -- BCC's current 10:1 voting rights Voting rights The right to vote on matters that are put to a vote of security holders. For example the right to vote for directors. voting rights The type of voting and the amount of control held by the owners of a class of stock. in WellPoint will be reduced to one vote per share; -- WellPoint will acquire rights to the Blue Cross name and mark, and will add approximately 310,000 medical members, Schaeffer said the endowment of the new foundations In mathematical logic, New Foundations (NF) is an axiomatic set theory, conceived by Willard Van Orman Quine as a simplification of the theory of types of Principia Mathematica. will have no impact on Blue Cross customers. ``Members of Blue Cross health plans will continue to have the same access to high quality health care at affordable prices. ``The public benefit plan will have no effect on health plans and premiums, nor will it have any effect on financial reserves needed to pay medical claims and support other business activities. There will be no changes in our relationships with hospitals, doctors and other health care providers.'' As part of its public benefit heritage, BCC has served the people of California since 1937 by providing accessible and affordable health care coverage. Since its restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). activities began in 1992, it has made $120 million in health-related charitable donations to benefit Californians. The plan approved today implements the commitment made by BCC made on Sept. 15, 1994 to create a public benefit legacy for the people of California through the foundations. Blue Cross of California is a non-profit, public benefit, managed health care corporation serving more than 6.8 million Californians. Blue Cross is the majority shareholder of WellPoint Health Networks Inc., the largest publicly-traded health care company in the state. BCC and WellPoint offer health maintenance organizations (HMO HMO health maintenance organization. HMO n. A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, ), preferred provider organizations pre·ferred provider organization n. Abbr. PPO A medical insurance plan in which members receive more coverage if they choose health care providers approved by or affiliated with the plan. (PPO PPO abbr. preferred provider organization PPO Managed care Preferred provider organization, see there Infectious disease Pleuropneumonia-like organism, see there ), and specialty managed care networks. Total benefits paid out on behalf of BCC subscribers and Medicare beneficiaries in 1995 exceeded $11.0 billion. CONTACT: Blue Cross of California, Woodland Hills Larry Bryant, 818/703-2473 |
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