THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Wednesday, January 8, 1997 TAG: 9701080339
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: 46 lines
Trigon Blue Cross Blue Shield, the state's largest health insurer, said Tuesday it will distribute 32 million common shares to policyholders by early February as part of its conversion to a publicly owned company.
The Richmond-based insurer also said it expects to issue 11.5 million common shares in an initial public offering.
At the planned price of $12 to $14 per share, Trigon could raise between $130 million and $150 million after deducting underwriting fees and other expenses.
In the past, Trigon has said it expected to distribute 64 million shares to its policyholders.
However, the company's investment bankers recommended reducing that number to 32 million as a way to raise the price of additional shares in a public offering above $10 each, Trigon chairman and chief executive Norwood H. Davis Jr. said.
Each policyholder, said Davis, will receive the same stake in Trigon they would have gotten under the earlier distribution plan.
``Originally we had decided to slice that pie in 64 million pieces,'' Davis said in a letter to policyholders. ``Now we have decided to slice it into 32 million pieces. But the pie is the same size, and so is your piece of it.''
Separately, Trigon said it will eliminate 276 positions from its work force by year-end. The jobs, including several in management, are in Richmond and Roanoke, said Brooke Taylor, a Trigon spokeswoman. The company has 3,775 employees in Virginia.
Faced with competitive pressure from other health insurers, Trigon is trying to bolster its efficiency by restructuring its work force, Taylor said.
Of the 276 jobs being eliminated, 66 are already vacant. Another 70 positions are likely to be eliminated through employee attrition, Taylor said.
Trigon also announced that Hugh R. Stallard, president of Bell Atlantic of Virginia, and Hunter B. Andrews, a Hampton attorney and former majority leader of the Virginia Senate, have been nominated for seats on the Trigon board of directors.
Stallard was chosen from a slate of nominees provided last year by the General Assembly's Joint Rules Committee. Andrews was one of three individuals nominated by Virginia Attorney General James Gilmore.
The General Assembly and the attorney general were given the power to nominate candidates for two seats on Trigon's board as part of an agreement reached with the company last year.