Foundation Health Shares Surge in Advance of Sale

Shares of Foundation Health Systems surged nearly 50% last week as Superior National Insurance Group said it expects to complete its $285-million purchase of Foundation’s money-losing workers’ compensation unit on Dec. 10.

Woodland Hills-based Foundation, one of California’s largest health insurers, on Friday saw a 32% jump in its share price, up 2 9/16 to 10 1/2--the biggest one-day percentage gain since Dec. 30, 1994.

Foundation shares had lost value this month amid concerns about rising medical costs as well as delays in the sale. The workers’ compensation business is the first of several units Foundation plans to sell so it can focus on running its healthiest managed-care businesses.

When Foundation’s sale of the unit to Superior National was disclosed in May, the two companies had said they expected it to close by the end of September.