Anthem successful in public stock offering

The conversion gives the active health plan consolidator more cash.

By Myrle Croasdale, AMNews staff. Nov. 19, 2001.

Anthem Inc., one of the most active buyers of Blue Cross Blue Shield plans, has an extra $1.9 billion in its pocket after completing two stock offerings Oct. 29.

A recession-wary market, looking for what it considers safe investments, snapped up Indianapolis-based Anthem's initial public offering on the New York Stock Exchange, buying 48 million shares at $36 each for $1.7 billion in fresh cash.

The shares fell at the high end of a projected range of $33 to $37. The original goal for the IPO was $1.1 billion. Analysts have said health care, including insurers, is considered to be a recession-proof industry.

Meanwhile, Anthem also received up to $200 million from a concurrent offering of 4 million shares of convertible stock. The company's assets before the stock offering were estimated at $5.7 billion.

The IPO makes Anthem the fifth-largest publicly traded managed care insurer in the United States, with its demutualization process completed Nov. 2. More than 7.8 million people in eight states are enrolled in Anthem-owned Blue Cross and Blue Shield plans. Anthem is also in the process of buying the Blues plan in Kansas, a deal expected to be completed by year's end.

Anthem's success may well motivate other Blues plans to get into the public arena at a faster clip, said Duane Sobecki, a senior partner with the Indianapolis health care consulting firm Corsair Health. [...]