COLORADO BLUES: WellPoint Ups Ante
WellPoint Health Networks of California sweetened its bid for Blue Cross Blue Shield of Colorado yesterday, after the Colorado Blues announced earlier this month that it would entertain new bids even as it moves forward with its sale to Anthem Inc. The Denver Post reports that WellPoint reentered the bidding war yesterday, upping the ante with a $266 million package that includes $150 million earmarked for a charitable foundation formed as part of the deal (Hubler, 7/30). The offer could challenge Anthem's offer of $155 million, with $140 million guaranteed for the foundation (Conklin, Denver Rocky Mountain News, 7/30). Last March, Wellpoint hinted that a final offer would "likely be in the $200 million to $240 million range," but shied away from making a final bid after it said a provision in the Anthem deal -- including one that appointed two Anthem representatives to the Blue Cross board -- unfairly influenced the Blues plan against any Wellpoint offer (Wall Street Journal, 7/30). The Denver Post reports that the two Anthem board members will "be excluded from evaluating the WellPoint offer." The Blues were expected to file a plan today with the Colorado Division of Insurance detailing its plan to covert to for-profit status and be sold to Anthem, but the filing "will be postponed until the board has enough time to consider the new offer," said Blues spokesperson Neil Westergaard. Wellpoint's new offer tops Anthem's bid by as much as $10 million "when it comes to the issue of most concern to regulators and activists: endowing a foundation to compensate the people of Colorado for decades of tax advantages the Blues enjoyed." In addition to the $150 million for the charity, WellPoint is offering a $100 million cash infusion into the Colorado Blues plan, $10 million to reimburse Anthem for administrative services already performed and a $6 million "breakup" fee to Anthem (7/30).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.