Healthcare Calls for Stock Rights’ Redemption

Healthcare USA said it has called for the redemption of its stock rights in connection with the pending $13.50-per-share friendly acquisition of the Orange-based concern by Maxicare Heath Plans Inc.

The stock rights, issued as a special dividend last year, allowed the holder to purchase a share of Healthcare common stock for $40. But if a hostile takeover triggered exercise of the rights, they effectively allowed the holder to buy the acquiring company’s stock at a 50% discount. Healthcare issued the rights as part of a “poison pill” plan to ward off a hostile takeover. If Healthcare were threatened with an unfriendly takeover, activation of the rights would substantially increase the purchase price and thus discourage the acquisition attempt.

In calling for redemption of the rights, Healthcare said payment of a redemption price of five cents per right will be made in conjunction with Maxicare’s cash payment. Los Angeles-based Maxicare is expected to complete its $68.9-million purchase on Sept. 30.

Healthcare has about 5.1-million common shares outstanding. The stock rights originally became effective in July 1985 as a special dividend of one right per share.