HealthCare Cool to Maxicare Overture
In an apparent rejection of merger overtures by Maxicare Health Plans Inc., HealthCare USA said Thursday that its “earnings prospects are quite good” and that it reserves its “poison pill” to fight off an unfriendly takeover.
HealthCare Chairman Harlan Loomas, in his first official response since learning that Maxicare had acquired an 11.9% stake in HealthCare, said he wanted to “demonstrate the earnings potential” of HealthCare, an Orange-based firm.
Los Angeles-based Maxicare, the nations’s largest publicly held health maintenance organization, said Monday that it wants to acquire the rest of HealthCare through a friendly merger.
“We are greatly disappointed by their response and are quite surprised,” said Fred Wasserman, Maxicare’s chairman and chief executive, when reached Thursday. “We believe the combination would be in the interests of both companies’ shareholders.”
Still, in a telephone interview Thursday, Loomas denied that his statement was a rejection of a possible merger with Maxicare.
“We don’t have an offer, so there’s nothing to reject,” Loomas said.
According to documents filed with the Securities and Exchange Commission, the two companies held several meetings during 1985 and this year to discuss a possible merger. In early February, Maxicare made an informal offer of $11 a share for HealthCare.
In a related development, Standard & Poor’s said Thursday that it had placed HealthCare’s $50 million in B- rated bond debt on its creditwatch list “with positive implications.” The New York-based credit-rating agency said the move “reflects the possible acquisition of HealthCare USA by Maxicare Health Plans Inc.”
While Loomas would not categorically reject a merger with Maxicare, he said Maxicare would have to pay above market value for HealthCare’s stock. On Thursday, HealthCare closed at $12.12 1/2 a share on the New York Stock Exchange. Moreover, a rights dividend plan adopted by HealthCare “will give the company a fair shot at demonstrating improved earnings,” Loomas said.
