ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Saturday, February 1, 1997 TAG: 9702030041
SECTION: BUSINESS PAGE: A-5 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
Investors around the world Friday began trading stock in Virginia's largest provider of health insurance.
Trigon Blue Cross Blue Shield, insurer of about one-third of Virginians, issued public stock for the first time as Trigon Healthcare Inc.
Investors drove up the price of the new stock from its debut listing of $13 to $17.75 a share.
Policyholders, who likely will own a big stake in the new company, didn't get to play the market, however. They will not receive shares until this summer.
Nearly 7.75 million shares were traded Friday on the New York Stock Exchange, with the price hitting $19 a share before falling back to the closing figure. Speculators took profits, said Tyler Pugh, senior vice president and manager of the Roanoke office of Wheat First Butcher Singer.
"It was very actively traded and very well received," Pugh said. The initial offering was of 15.5 million shares. Of that, 12.4 million shares were offered in the United States and Canada. The other 3.1 million are traded on foreign markets.
Pugh said his brokerage firm, one of the offering's underwriters, did a good business. "We had a good demand for the stock," he said. Some customers were investing long-term in Trigon, but others were seeking to make money on a quick trade following the initial public shares.
Trigon said the public offering is expected to close Wednesday, when the company will become Trigon Healthcare, a stock company owned by shareholders. Now, as Trigon Blue Cross Blue Shield, it is a mutual company owned by policyholders.
Some of those policyholders will become shareholders, provided they made that choice in December, said spokeswoman Brooke Taylor. Policyholders also had the option of being paid for their interest in cash.
Paperwork and administrative procedures will take several weeks before policyholders receive their notices of share ownership. And they cannot trade their shares for six months - until Aug. 5, according to terms approved by regulators. That means they will receive a book entry, or a notice of their ownership, initially. Only after they receive stock certificates late this summer will they be able to trade the shares.
Policyholders were notified individually last year about the number of shares they will own.
Taylor said Trigon has 183,000 individual and 15,700 group policies in several states, but primarily in Virginia. She had no figures on the number who elected to receive cash instead of shares. The group policyholders are mostly employers.
The company said it would use the money from the stock sale to make cash payments to some policyholders, pay a portion of the $175 million levied by the state for the right to convert to a stock company, and expand the company's networks, products and geographic base.
The company has 1.9 million customers in 34 states. Its stock trading symbol is TGH.
Underwriters for the initial offering were Merrill Lynch & Co., Alex Brown & Sons Inc., Dean Witter Reynolds Inc., Morgan Stanley & Co., and Wheat First Butcher Singer.
Copies of Trigon Healthcare Inc.'s stock prospectus to investors are available by writing Merrill Lynch Preliminary Prospectus Department, 250 Vesey St., New York 10281.
LENGTH: Medium: 65 linesby CNB