OCI > Acquisition of Cobalt Corporation

Acquisition of Cobalt Corporation

Last Updated: September 24, 2003

Information on the Acquisition of Cobalt Corporation by WellPoint Health Networks Inc.

On June 20, 2003, WellPoint Health Networks Inc. (hereinafter also, "WellPoint") filed a plan to acquire Cobalt Corporation (hereinafter also, "Cobalt"), which controls the following Wisconsin insurance corporations: Blue Cross & Blue Shield United of Wisconsin; Compcare Health Services Insurance Corporation; United Heartland Life Insurance Company; United Wisconsin Insurance Company; Unity Health Plans Insurance Corporation; and Valley Health Plan, Inc. Under the plan, Cobalt will be merged with and into Crossroads Acquisition Corp. (hereinafter also, "Crossroads"), a direct, wholly owned subsidiary of WellPoint. Immediately following the merger, Crossroads, as the surviving corporation, would be renamed Cobalt Corporation.

The plan of acquisition will be implemented through an Agreement and Plan of Merger by and among WellPoint, Crossroads, and Cobalt and a Voting and Lockup Agreement by and between WellPoint and Wisconsin United for Health Foundation, Inc.

At the time the Agreement and Plan of Merger was signed, the aggregate consideration to be paid Cobalt's shareholders, other than Cobalt's and WellPoint's subsidiaries that hold shares of Cobalt common stock, was valued at approximately $906,000,000, or $20.50 per share of Cobalt's common stock. Under the proposed plan, each share of Cobalt common stock issued and outstanding, other than shares held by Cobalt, WellPoint, Crossroads, and Cobalt's and WellPoint's subsidiaries, will be converted into the right to receive (ii) $10.25 in cash and (ii) 0.1233 of a share of WellPoint common stock. The stock portion of the consideration to be paid to Cobalt's shareholders, other than Cobalt's and WellPoint's subsidiaries that hold shares of Cobalt common stock, is subject to adjustment so that, at closing, those shareholders of Cobalt would receive no less than $8.75 per share in WellPoint common stock and no less than $19.00 per share in aggregate stock and cash consideration.

As proposed, each share of common stock held by Cobalt's and WellPoint's subsidiaries will be converted into the right to receive 0.2466 of a share of WellPoint common stock, which amount is also subject to adjustment so that Cobalt's and WellPoint's subsidiaries receive approximately twice the amount of stock consideration per share received by Cobalt's other shareholders as described above. In the proposed merger, no cash will be paid to Cobalt's and WellPoint's subsidiaries that hold shares of Cobalt's common stock.

WellPoint will not issue fractional shares to any shareholder in connection with this transaction. Instead, WellPoint will pay cash, without interest, based on the market value of its common stock on the date of the merger for any fractional share that a shareholder, except Cobalt's and WellPoint's subsidiaries that hold shares of Cobalt common stock, would otherwise have been entitled to receive.

The plan of acquisition filed by WellPoint, along with all pertinent correspondence and statutorily required information, will be placed in this section of OCI's Web site.

As required by law, OCI held a public hearing concerning this application for acquisition of control on September 8, 2003. The record of hearing was held open for public comment until 4:30 p.m. on September 16, 2003. On September 19, 2003, the plan of acquisition was approved by Commissioner Gomez.

Notations on Accessing Information

Forms and other documents filed by WellPoint and Cobalt with the U.S. Securities and Exchange Commission (hereinafter also, "SEC") may be accessed on that federal agency's Web site at http://www.sec.gov.

The Annual Reports to Stockholders of WellPoint for the years ended December 31, 2002, 2001, 2000, 1999, and 1998 may be accessed on WellPoint's Web site at http://www.wellpoint.com/investor_info/annual_reports/.

The Annual Reports to Shareholders of Cobalt Corporation for the years ended December 31, 2002 and 2001 may be accessed on Cobalt's Web site at http://www.cobaltcorporation.com.

Application Material Filed on June 20, 2003

Transmittal Letter of June 20, 2003
Form A - Statement Regarding the Acquisition of Control of or Merger with a Domestic Insurer
Exhibit 1-A (4.9M) - Agreement and Plan of Merger dated as of June 3, 2003 among WellPoint Health Networks Inc., Crossroads Acquisition Corp., and Cobalt Corporation
Exhibit 1-B - Voting and Lockup Agreement dated as of June 3, 2003, by and between WellPoint Health Networks Inc. and Wisconsin United for Health Foundation, Inc.
Exhibit 1-C - Resolutions of the Board of Directors of Cobalt Corporation dated June 3, 2003 Authorizing the Merger
Exhibit 1-D - Resolutions of the Board of Directors of WellPoint Health Networks Inc. Authorizing the Merger
Exhibit 1-E - Action Taken by Unanimous Written Consent of the Board of Directors of Crossroads Acquisition Corp. dated June 3, 2003 Authorizing the Merger
Exhibit 2-A - Annual Report on Form 10-K of WellPoint Health Networks Inc. for the year ended December 31, 2002 (See SEC Web site)
Exhibit 2-B - Annual Report on Form 10-K of WellPoint Health Networks Inc. for the year ended December 31, 2001 (See SEC Web site)
Exhibit 2-C - Annual Report on Form 10-K of WellPoint Health Networks Inc. for the year ended December 31, 2000 (See SEC Web site)
Exhibit 2-D - Annual Report on Form 10-K of WellPoint Health Networks Inc. for the year ended December 31, 1999 (See SEC Web site)
Exhibit 2-E - Annual Report on Form 10-K of WellPoint Health Networks Inc. for the year ended December 31, 1998 (See SEC Web site)
Exhibit 2-F - Annual Report to Stockholders of WellPoint Health Networks Inc. for the year ended December 31, 2002 (See WellPoint Web site)
Exhibit 2-G - Annual Report to Stockholders of WellPoint Health Networks Inc. for the year ended December 31, 2001 (See WellPoint Web site)
Exhibit 2-H - Annual Report to Stockholders of WellPoint Health Networks Inc. for the year ended December 31, 2000 (See WellPoint Web site)
Exhibit 2-I - Annual Report to Stockholders of WellPoint Health Networks Inc. for the year ended December 31, 1999 (See WellPoint Web site)
Exhibit 2-J - Annual Report to Stockholders of WellPoint Health Networks Inc. for the year ended December 31, 1998 (See WellPoint Web site)
Exhibit 2-K - Quarterly Report on Form 10-Q of WellPoint Health Networks Inc. for the year ended March 31, 2003 (See SEC Web site)
Exhibit 2-L - Pre-Merger Organizational Chart of WellPoint Health Networks Inc. and its Affiliates
Exhibit 2-M - Post-Merger Organizational Chart of WellPoint Health Networks Inc. and its Affiliates
Exhibit 4-A (Part 1) (2.6M), Exhibit 4-A (Part 2) (1.2M) - WellPoint Health Networks Inc.'s $750,000,000 Five Year Unsecured Revolving Credit and Competitive Advance Facility
Exhibit 4-B (Part 1) (2.1M), Exhibit 4-B (Part 2) (998k) - WellPoint Health Networks Inc.'s $250,000,000 364-Day Unsecured Revolving Credit Facility
Exhibit 4-C - Placeholder for Fairness Opinion Issued by UBS Warburg, LLC to the Board of Directors of Cobalt Corporation
Exhibit 5-A - Certificate of Incorporation for Crossroads Acquisition Corp. filed on June 2, 2003
Exhibit 5-B - By-Laws of Crossroads Acquisition Corp. effective June 2, 2003
Exhibit 5-C - Amended Articles of Incorporation of Cobalt Corporation
Exhibit 5-D - Third Amended and Restated Bylaws of Cobalt Corporation
Exhibit 10-A - Press Release Issued by WellPoint Health Networks Inc. and filed with the U.S. Securities and Exchange Commission on June 4, 2003
Exhibit 10-B (2.3M) - Presentation Materials of WellPoint Health Networks Inc. and filed with the U.S. Securities and Exchange Commission on June 4, 2003
Exhibit 12-A - Annual Report to Shareholders of Cobalt Corporation for the year ended December 31, 2002 (See Cobalt Corporation's Web site)
Exhibit 12-B - Annual Report to Shareholders of Cobalt Corporation for the year ended December 31, 2002 (See Cobalt Corporation's Web site)

Application Material Filed on July 3, 2003

Transmittal Letter dated July 3, 2003
Registration Statement of WellPoint Health Networks Inc. on Form S-4 as filed with the U.S. Securities and Exchange Commission on July 1, 2003

OCI Request for Information as of July 10, 2003

OCI Letter of July 10, 2003

Response of July 23, 2003

Letter of July 23, 2003
Attachment entitled "Responses to OCI Comments"
Exhibit A - Confidentiality Agreement between WellPoint Health Networks Inc. and its Affiliates and Cobalt Corporation and its Affiliates dated April 29, 2003
Exhibit B - Consent to Jurisdiction Statement on Form E filed by WellPoint Health Networks Inc. dated July 21, 2003
Exhibit C - Consent to Jurisdiction Statement on Form E filed by Crossroads Acquisition Corp. dated July 21, 2003
Exhibit D - Balance sheet of WellPoint Health Networks Inc. as of March 31, 2003
Exhibit E - Fairness Opinion Issued by UBS Warburg, LLC to the Board of Directors of Cobalt Corporation
Exhibit F - Texas Department of Insurance's Press Release Announcing Consent Orders
Exhibit G - Consent Order between the Texas Department of Insurance and UNICARE Life & Health Insurance Company