1. Business

WellCare selling common stock and borrowing to raise cash for Meridian purchase

WellCare Health Plans is based on Henderson Road in Tampa. (Times files)
WellCare Health Plans is based on Henderson Road in Tampa. (Times files)
Published Aug. 6, 2018

TAMPA — WellCare Health Plans needs cash for its planned $2.5 billion purchase of Meridian Health Plans of Illinois and Michigan and MeridianRx, so on Monday it announced plans to sell more than 3.9 million shares of common stock and issue $700 million in debt.

If purchased at Friday's closing price of a little less than $276 per share, the stock offering would raise nearly $1.1 billion. The debt is coming in the form of senior notes.

The money raised would be used to pay fees and expenses related to the Meridian purchase, WellCare's largest acquisition ever, as well as for general corporate purposes, according to the company. The moves announced Monday are consistent with what WellCare said it planned to do when it announced the Meridian acquisition in May.

PREVIOUS COVERAGE: $2.5 billion Meridian deal is WellCare's biggest acquisition ever, but also a step in a strategic plan for growth

Neither offer is contingent on Meridian purchase being consummated, though the company said it expects the deal to close in the next few months, subject to getting regulatory approvals and other conditions.

The notes are being offered only to institutional buyers. The underwriters for the stock offering will get a 30-day option to buy up to another 598,606 shares of common stock.

Last week, WellCare reported that its second-quarter profits more than doubled, rising from $74.1 million last year to $151.6 million this year, and that its revenues rose 8 percent to $4.6 billion.

In early trading Monday, WellCare stock was at $270.21 per share, down about 1.9 percent.

MORE: Go here for more Business News

Contact >Richard Danielson


This site no longer supports your current browser. Please use a modern and up-to-date browser version for the best experience.

Chrome Firefox Safari Edge