8-KSecurities & ListingOther EventsExhibits & Filings

CENTENE CORP 8-K Report, Unregistered Securities Sale (Feb 27, 2018)

Filed February 27, 2018For Securities:CNC

Summary

Centene Corporation (CNC) filed an 8-K on February 27, 2018, to disclose a significant unregistered sale of equity securities related to an Agreement and Plan of Merger with MHM Services, Inc. (MHM). This transaction involves MHM merging into a wholly owned subsidiary of Centene, with a portion of the merger consideration to be paid in shares of Centene Common Stock. Approximately 1,777,003 shares are expected to be issued, based on a hypothetical volume-weighted average price of $100.45, though the final number will depend on the stock's trading price closer to the transaction's closing. The issuance of Centene Common Stock to MHM's former stockholders is being conducted under an exemption from registration, specifically Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D. This implies that the recipients are sophisticated investors who will provide representations regarding their accredited investor status and investment intent. The company also announced the execution of the Merger Agreement via press release on February 26, 2018, attached as an exhibit to this filing.

Key Highlights

  • 1Centene Corporation is acquiring MHM Services, Inc. through a merger agreement.
  • 2A significant portion of the acquisition consideration will be paid in Centene Common Stock.
  • 3Approximately 1.78 million shares of Centene stock are projected to be issued as partial merger consideration.
  • 4The exact number of shares to be issued is contingent on Centene's stock price in the ten trading days prior to closing.
  • 5The shares will be issued under an exemption from registration (Section 4(a)(2) and Rule 506), indicating they are going to accredited investors.
  • 6The transaction was announced via press release on February 26, 2018.

Frequently Asked Questions

This 8-K filing primarily discloses Centene's entry into a merger agreement with MHM Services, Inc. and the details surrounding the unregistered sale of Centene's common stock to be issued as partial consideration for the acquisition.

Centene will pay a portion of the merger consideration in shares of its common stock. The remaining portion is not detailed in this specific filing but is part of the overall merger agreement.

No, the shares of Centene Common Stock to be issued in this transaction will be issued pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D. This means the recipients are typically considered accredited investors and are making representations about their investment status.

Based on a hypothetical volume-weighted average price of $100.45 per share (the closing price on February 23, 2018), Centene would issue approximately 1,777,003 shares. The actual number may vary depending on the stock's trading performance closer to the closing date.