Healthcare’s Stock Surge Is Questioned : Chairman Can’t Explain Why Shares Have Risen

Healthcare USA acknowledged Thursday that it has received a number of inquiries about possible mergers or acquisitions, but Harlan W. Loomas, the company’s chairman and chief executive, said that he has no deal on the table and can’t explain why the company’s stock has jumped more than three points in the last four days.

The unusual trading activity prompted the New York Stock Exchange to ask Healthcare to issue a statement explaining why its shares were so active.

At the close of trading Thursday, Healthcare shares reached $19.63, up a full point from the day before, and up $3.50 from the $16.13 a share it sold for at the end of Monday’s trading. In a telephone interview Thursday, Loomas said he did not know why the company’s stock had gone up but speculated that the recent purchase of more than 10% of the company’s stock by institutional investors may have been misconstrued.

“They (the exchange) contacted me and asked me more or less, ‘what’s going on?’ ” Harlan said. “I said nothing. Then they asked me why the stock is going up, and I told them ‘I don’t know.’ ”

“As far as I know, there are no offers outstanding or agreements in principle,” Harlan added. “We are a brand new company, having divested ourselves of a lot of previous operations.”

Santa Ana-based Healthcare USA has been a publicly held company since 1981. In May, the company switched from its principal business of owning hospitals to operating prepaid health insurance plans and changed its name from Greatwest Hospitals Inc.

In his prepared statement to the stock exchange, Harlan said: “As with many other companies, such inquiries (to merge or acquire) are received by the company from time to time in the normal course. The company’s board of directors will always evaluate these inquiries in the context of its duties to all stockholders.”