SafeGuard Health Enterprises Inc., Aliso Viejo, Calif., says its stockholders have approved a plan to take the company private.[@@]

SafeGuard provides or administers dental and vision coverage for 1.5 million residents of California, Florida and Texas. The company wants to go private by carrying out a 1-for-1,500 reverse stock split that will reduce the number of SafeGuard shareholders enough to let the company give up its registration as a public company.

The deal affects 5.8 million shares of common stock, according to a proxy that SafeGuard has filed with the U.S. Securities and Exchange Commission. SafeGuard shares have been selling for a price of about $2 on the OTC Bulletin Board.

In a 1-for-1,500 reverse stock split, the issuing company replaces every 1,500 shares of old, “pre-split” stock outstanding with 1 share of new stock. SafeGuard is promising to pay $2.25 per pre-split share to stockholders who otherwise would receive fractional shares of the new stock.

Because SafeGuard will use cash, rather than stock, to compensate investors who receive fractional shares, the transaction will reduce the number of stockholders to fewer than 300, from about 900, SafeGuard says in the proxy. Federal securities laws let companies with fewer than 500 stockholders cancel their registrations and return to operating as private companies.

“We are pleased our stockholders have agreed that going private is in the best interests of our company and its stockholders,” SafeGuard President James Buncher says in a statement about the shareholder vote.

SafeGuard originally went public in 1983, but SafeGuard’s board believes the company “currently derives no material benefit from its public company status,” the company says in the proxy.

SafeGuard also points out that complying with the new Sarbanes-Oxley Act financial reporting requirements for public companies would cost it about $250,000 in the first year and $150,000 per year in later years.