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.