THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Sunday, September 1, 1996 TAG: 9608310666
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
LENGTH: 65 lines
Will Trigon's conversion to a publicly traded company affect policyholders' insurance coverage?
No. Trigon says the proposed change will have no impact on policyholders' premiums or the terms of their coverage.
What's the advantage to being an investor-owned company and having publicly traded stock?
A company with shares that trade publicly can acquire other companies by using its shares as currency. If it decides to buy another company for cash or it needs funds for improvements, a public company can raise the money by selling added shares to investors. Otherwise, a company must raise money for acquisitions and other uses by borrowing or by relying on its retained earnings.
Who owns Trigon now?
Its 185,000 individual policyholders and 16,000 group policyholders.
Who would own Trigon if it becomes a public company?
Those policyholders who receive shares during the conversion and investors who buy shares through a public stock offering that will be part of the conversion.
If the conversion is successful, what will be Trigon's structure?
There will be a new holding company, Trigon Healthcare Inc., and an insurance company subsidiary, Trigon Insurance Co. Trigon Insurance will do business under the name Trigon Blue Cross Blue Shield.
Who is eligible to vote on Trigon's conversion plan?
Individuals and groups that had Trigon policies on June 30, 1996.
Who will be eligible to receive shares in the company?
Individuals and groups that had Trigon policies on Dec. 31, 1995.
Do Trigon's executives stand to benefit from the conversion to a public company?
There would not be an immediate benefit. Trigon executives have told policyholders that none of them would be rewarded for carrying out the conversion. However, it's possible that Trigon's board of directors would provide executives with stock options and stock incentive plans after the conversion.
How much stock does Trigon plan to distribute to eligible policyholders?
64 million common shares.
How did Trigon determine how to distribute those shares?
It used a two-part formula. Fifteen percent of the shares would be distributed according to the number of votes each policyholder has. The remaining 85 percent would be distributed according to the profitability of each policyholder's business with Trigon.
How many shares of Trigon stock will be available for sale to outside investors?
Depending on the price of the shares, the amount will range from 13.6 million to 32.3 million, according to Trigon documents.
If Trigon does convert, what will be the price of its shares?
The price will be set shortly before the public offering. In documents distributed to its policyholders, Trigon used hypothetical prices of $6.50, $11 and $15.50 a share.
Where will Trigon's stock trade?
The company has applied to have the shares listed on the New York Stock Exchange. The proposed ticker symbol is TGH.
If Trigon receives approval from policyholders and regulators, when will the conversion to a public company occur?
The company predicts it will take place late this year or in early 1997.
What happens if Trigon's conversion plan isn't approved?
It will continue doing business as it does now and will remain a policyholder-owned company. However, Trigon says the failure to convert could limit its growth. by CNB