Foundation Gains as Date Set for Unit’s Sale

Foundation Health Systems Inc. stock rose as much as 27% as Superior National Insurance Group Inc. said it expects to complete its $285-million purchase of Foundation’s money-losing workers’ compensation unit Dec. 10. Foundation shares lost about a third of their value this month amid concern about rising medical costs as well as delays in the sale, which is part of the health maintenance organization’s plan to shed units that aren’t related to its healthiest HMO businesses. The company has said it’s considering selling two hospitals in East Los Angeles as well as health plans in Texas, Louisiana and Oklahoma. The businesses it plans to focus on include health plans in California, Arizona, Florida and the Northeast, as well as mental health and pharmacy plans and U.S. military health-care contracts. Woodland Hills-based Foundation, one of California’s largest health insurers, rose $1.63 to close at $7.94 on the NYSE. Superior National, based in Calabasas, fell 13 cents to close at $15.25 on Nasdaq.