NU Online News Service, Aug. 8, 3:19 p.m. – Cobalt Corp., Milwaukee, says it is calling off a proposed sale of 7.5 million shares of common stock because of the recent volatility of the stock market.
The managed care company, which is already publicly traded, had filed documents June 20 announcing plans to conduct a “secondary offering,” or resale, of existing common stock.
The offering would have included 2.5 million shares from Cobalt and 5 million shares from the Wisconsin United for Health Foundation, a health care charity that is Cobalt’s largest stockholder. The foundation holds 31 million Cobalt shares, or more than two-thirds of Cobalt’s outstanding common stock.
Today, “in light of the current market conditions, we do not believe this offering would serve the best interests of our shareholders,” Cobalt Chairman Thomas Hefty said in a statement.
Cobalt already has enough cash to fund its operations, and it recently established a $30 million credit facility, Hefty said.
Cobalt, which was formed through the combination of Blue Cross & Blue Shield United of Wisconsin and United Wisconsin Services Inc., reported in June that it hoped to use the cash from its portion of the secondary offering for general corporate purposes.
The Wisconsin United foundation would have used its offering proceeds to pay for public health programs.
The lead managers for the offering were UBS Warburg L.L.C., New York, and Salomon Smith Barney Inc., New York.
The co-managers were CIBC World Markets Corp., New York, and Robert W. Baird & Company, Milwaukee.