8-KSecurities & Listing

CENTENE CORP 8-K Report, Unregistered Securities Sale (Jul 1, 2014)

Filed July 1, 2014For Securities:CNC

Summary

Centene Corporation (CNC) filed an 8-K on July 1, 2014, to report on the completion of a transaction involving the assignment of a contract with the Louisiana Department of Health and Hospitals under the Bayou Health Shared Savings Program. This contract was assigned by Community Health Solutions of America, Inc. to Centene's wholly owned subsidiary, Louisiana Healthcare Connections, Inc. (LHCC). As a result of this closing, Centene issued 746,369 shares of its common stock. The company asserts that these shares were issued in reliance on the exemption provided by Section 4(a)(2) of the Securities Act of 1933, signifying a transaction not involving a public offering and based on representations from the seller. Investors should note this issuance of equity, even if in a private transaction, as it represents a dilution of existing shareholders' ownership.

Key Highlights

  • 1Centene Corporation (CNC) completed a contract assignment transaction on July 1, 2014.
  • 2The transaction involved the Bayou Health Shared Savings Program contract in Louisiana.
  • 3Community Health Solutions of America, Inc. assigned the contract to Centene's subsidiary, Louisiana Healthcare Connections, Inc. (LHCC).
  • 4Centene issued 746,369 shares of its common stock as part of this transaction.
  • 5The equity issuance was conducted under the exemption provided by Section 4(a)(2) of the Securities Act of 1933 (private placement).
  • 6This issuance represents a non-public offering of equity securities.

Frequently Asked Questions

The 8-K filing was made to report the completion of a transaction where Centene Corporation issued shares of its common stock in connection with the assignment of a contract related to the Bayou Health Shared Savings Program in Louisiana.

Centene issued 746,369 shares of its common stock. These shares were issued as part of the consideration for the assignment of the Bayou Health Shared Savings Program contract to its subsidiary, Louisiana Healthcare Connections, Inc.

No, the shares were issued in reliance on the exemption provided by Section 4(a)(2) of the Securities Act of 1933, which exempts transactions that do not involve a public offering. This means it was a private placement of equity.

This transaction indicates Centene's expansion or consolidation of its presence in the Louisiana managed care market through its subsidiary LHCC, by acquiring a valuable contract. The issuance of stock, even in a private placement, is a form of capital raise or consideration that can impact the company's financial structure and shareholder equity.