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WellPoint Inc. executives
“explored” a plan to take the company private, its chief financial officer told
investors today, according to a Reuters report.
Because the stock price of
the Indianapolis health insurer has been so low, its leaders considered using
its own cash and lots of debt to help it buy all the shares of its publicly
traded stock, a move called a leveraged buyout, or LBO.
“We have two factors that
make an LBO difficult, but definitely something that we evaluated and
explored,” Wayne DeVeydt, WellPoint’s CFO, told an investor conference
broadcast over the World Wide Web.
WellPoint’s market worth has
plunged 45 percent in the 18 months and now sits at $24 billion, Reuters said.
One hurdle WellPoint faced
was the amount of borrowing it would have to do. That could have jeopardized
its debt ratings and spooked its large national employer clients, Reuters
reported.
The other problem was that
the Blue Cross Blue Shield Association, of which WellPoint is a member, has
ownership rules that prevent one entity from having large stakes.
WellPoint operates Blue
Cross plans in 14 states, including
DeVeydt also said company leaders are considering a dividend that the company
would begin paying to its shareholders.
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