8-KLeadership ChangesAcquisitions & DispositionsMaterial Agreements+2

Elevance Health, Inc. 8-K Report, Material Agreement (Dec 28, 2005)

Filed December 28, 2005For Securities:ELV

Summary

Elevance Health, Inc., formerly known as WellPoint, Inc., filed this Form 8-K on December 28, 2005, to report the consummation of its merger with WellChoice, Inc. The merger, initially agreed upon on September 27, 2005, closed on December 28, 2005. As a result of the merger, WellChoice shareholders received $38.25 in cash and 0.5191 shares of WellPoint common stock per WellChoice share. To finance the cash portion of the merger consideration and associated fees, WellPoint secured a $3.0 billion bridge loan facility. On the closing date, the company drew $1.7 billion under this facility and simultaneously issued $1.0 billion of commercial paper. WellPoint intends to replace this short-term financing with long-term debt, including potential issuance of up to $3.2 billion in long-term debt securities and further utilization of its existing 5-Year Credit Agreement, depending on market conditions.

Key Highlights

  • 1Elevance Health (formerly WellPoint) completed its merger with WellChoice, Inc. on December 28, 2005.
  • 2WellChoice shareholders received $38.25 in cash and 0.5191 shares of WellPoint common stock per share.
  • 3A $3.0 billion bridge loan facility was established to finance the merger.
  • 4The company drew $1.7 billion from the bridge loan and issued $1.0 billion in commercial paper on the merger closing date.
  • 5Proceeds from the bridge loan and commercial paper were used to partially fund the merger and related expenses.
  • 6Elevance Health plans to secure permanent financing through long-term debt securities and existing credit facilities.
  • 7Mr. John E. Zuccotti was appointed to the Board of Directors following the merger.

Frequently Asked Questions

The primary purpose of this Form 8-K filing was to report the consummation of the merger between WellPoint, Inc. (now Elevance Health) and WellChoice, Inc. It also disclosed the financing arrangements put in place to fund the transaction.

The merger was financed through a combination of debt. WellPoint secured a $3.0 billion bridge loan facility, drawing $1.7 billion on the closing date. Additionally, $1.0 billion of commercial paper was issued. The company intends to replace this short-term financing with more permanent, long-term debt.

Each share of WellChoice common stock was converted into the right to receive $38.25 in cash and 0.5191 shares of WellPoint common stock.

WellPoint intends to obtain permanent financing for the merger consideration by issuing up to $3.2 billion of long-term debt securities and potentially through borrowings under its existing 5-Year Credit Agreement. The exact mix will depend on market conditions.