PacifiCare to Repurchase Shares to Shore Up Stock

PacifiCare Health Systems Inc., facing criticism from shareholders over its declining stock price, said Monday that it plans to repurchase up to 10% of its shares of common and preferred stock.

Since reaching a 52-week high of $85 in March, shares of the large managed care company have been slumping. On Friday, the stock hit a low of $47.88 a share. The drop came after the company issued a November warning that it sees a fourth-quarter loss on higher-than-expected charges and medical costs.

Recently, the company drew criticism from investment manager Franklin Mutual Advisers Inc. for failing to move aggressively to boost the stock price. Franklin Mutual, which holds a 9.9% stake in PacifiCare, is run by by Michael Price. The stock rose Monday by 25 cents a share to $48.13.

PacifiCare said it has 14.8 million Class A common shares, 27.2 million Class B common shares and 10.5 million Series A preferred shares.

The company said it recently renegotiated its credit line, which allows it to buy back more than the $100 million in stock previously permitted for covering employee stock options and for other corporate uses.