NU Online News Service, Jan. 21, 11:16 a.m. – Cobalt Corp., Milwaukee, says it wants to nominate its own slate of directors in the upcoming proxy for American Medical Security Group Inc.

Cobalt needs more seats on the American Medical board so that it can make the Green Bay, Wis., insurer buy back stock and take other efforts to increase the value of its stock, Cobalt says in a report filed with the U.S. Securities and Exchange Commission.

American Medical has more capital than it needs to finance its current level of growth, and it ought to use some of that capital to buy back shares held by Cobalt and other investors, Cobalt argues.

American Medical responded by pointing out that Cobalt already has three seats on the American Medical board.

Cobalt would probably get better results if it held a secondary public offering for its American Medical shares, rather than trying to make American Medical buy back stock, American Medical contends.

American Medical says it is seeking SEC permission to keep the Cobalt board nominees out of its spring proxy statement.

Figures from Commodity Systems Inc., Boca Raton, Fla., suggest American Medical shares have been doing better than Cobalt shares over the past year.

American Medical shares have traded in a price range between $4.75 and $12.50 over the past 52 weeks. The price began climbing in September 2001 and now stands close to the 52-week high.

Cobalt shares are selling for about $6, in the middle of their 52-week price range of $3.99 to $9.05 per share.

Cobalt, which recently changed its name from United Wisconsin Services Inc., is the parent company for the Blue Cross and Blue Shield company in Wisconsin.

Cobalt gave birth to American Medical in 1998, by spinning off its individual and small-group health insurance operations. Cobalt still has 6.3 million American Medical shares, which amounts to 45% of American Medical common stock, according to documents filed with the SEC.

Cobalt reported in an SEC filing that it wants to sell its American Medical stock to American Medical and other parties because it no longer views the stake as a strategic asset.

Cobat and its Blue Cross and Blue Shield subsidiary “will continue to consider all options open to them as a major shareholder of the issuer to enhance the value of their investment and shareholder value generally,” Cobalt says.