Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, May 9, 1995 TAG: 9505090102
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
DATELINE: LENGTH: Medium
The plan could be presented at a meeting in Roanoke this summer. And if that's the case, some analysts and brokers said, it should find a ready market.
Brooke Taylor, spokeswoman for Trigon in Richmond, confirmed that the company has postponed its annual meeting. The meeting has been scheduled for Wednesday in Richmond and was postponed until July 19, the same day the company's board of directors is to meet in Roanoke.
As a mutual company, Trigon is owned by its policyholders, the traditional norm for the insurance industry. If it goes public, it would be owned by shareholders, although there would be a mechanism for policyholders to receive stock.
Trigon, the state's largest health insurer, provides health and hospital coverage for about a third of all Virginians. In Roanoke, it employs 1,000 workers.
Taylor said that the health insurance company is "considering a number of options regarding our ability to raise capital," but no decisions have been made. As to reports that the company intends to go public, Taylor added, "we didn't say that."
However, in a press briefing last December in Roanoke, Trigon Chairman Norwood H. Davis Jr. mentioned changing to a public, shareholder-owned company as an action under consideration for the long term.
Kim Barnes, executive director of the Richmond Area Business Group on Health said that "this is Norwood's No. 1 issue to complete. I think he's trying to work out all the problems and politics of it so he can roll it out at the annual meeting."
Trigon has not asked the Virginia Bureau of Insurance for permission to sell stock, according to Peter Smith, general counsel for the bureau. But Smith said Trigon officials have discussed the possibility informally with state regulators.
If it goes public, Trigon would find a ready market for its stock, according to insurance analysts.
That's despite Trigon's recent problems. Last September, the company paid $5 million to the Virginia Corporation Commission, settling complaints of failing to pass to policyholders the discounts it received from hospitals and other health providers. In April, the company, without admitting wrongdoing, agreed to pay $950,000 in fines for allegedly misleading advertising.
Tyler Pugh, senior vice president and Roanoke branch manager for Wheat First Butcher Singer, said depending on how the deal would be structured, there would be interest because stocks in the health care field are in demand.
At Scott & Stringfellow Investment Corp., Guy W. Ford, director of research, said there is a good market for managed health care and health service companies.
George Shipp, who follows health care for Scott & Stringfellow, said Blue Cross Blue Shield companies have gone public in California, Missouri and Wisconsin.
by CNB