SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
December 17, 1998
Date of Report (Date of earliest event reported): (December 17, 1998)
RIGHTCHOICE MANAGED CARE, INC.
(Exact Name of Registrant as Specified in Its Charter)
MISSOURI
(State or Other Jurisdiction of Incorporation)
1-13248 43-1674052
(Commission File Number) (I.R.S. Employer Identification No.)
1831 Chestnut Street, St. Louis, Missouri 63103-2275
(Address of principal executive offices) (Zip Code)
314-923-4444
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Items 1. Changes in Control of Registrant.
Not applicable.
Item 2. Acquisition or Disposition of Assets.
Not applicable.
Item 3. Bankruptcy or Receivership.
Not applicable.
Item 4. Changes in Registrant's Certifying Accountant.
Not applicable.
Item 5. Other Events.
The Registrant's Press Release, dated December 17, 1998,
is attached as Exhibit 99(a) hereto and is incorporated herein by reference.
Item 6. Resignations of Registrant's Directors.
Not applicable.
Item 7. Financial Statements
Pro Forma Financial Statements and Exhibits.
(a) - (b) Not applicable.
(c) Exhibits Required by Item 601 of Regulation S-K:
99(a) Press Release of Registrant, dated December 17, 1998.
Item 8. Change in Fiscal Year.
Not applicable.
Item 9. Sales of Equity Securities Pursuant to Regulation S.
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, as amended, the Registrant has duly caused this
report to be signed on its behalf by the undersigned thereunto
duly authorized.
Dated: December 17, 1998
RIGHTCHOICE MANAGED CARE, INC.
By: /s/ Sandra A. Van Trease
Sandra A. Van Trease
Chief Financial Officer,
Executive Vice President and
Chief Operating Officer
EXHIBIT INDEX
Exhibit No. Description
99(a) Press Release of RightCHOICE Managed Care, Inc., dated
December 17, 1998.
Exhibit 99(a)
RIGHTCHOICE MANAGED CARE, INC. LETTERHEAD
Contact: Clara Kinner (314) 923-6268
Deb Wiethop (314) 923-4767
BLUE CROSS AND BLUE SHIELD OF KANSAS CITY ANNOUNCES PROPOSAL AT
PUBLIC HEARING
RIGHTCHOICE DECLINED EARLIER INTEREST BY KANSAS CITY PLAN
ST. LOUIS, DECEMBER 17, 1998 -- RightCHOICE Managed Care, Inc.
(NYSE:RIT) announced today that Blue Cross and Blue Shield of
Kansas City suggested a combination with RightCHOICE and its
parent company, Blue Cross and Blue Shield of Missouri, as an
alternative to the Settlement Agreement that Blue Cross and
Blue Shield of Missouri and RightCHOICE reached September 20
with the Missouri Attorney General and Department of
Insurance. That settlement is subject to court approval and
is currently under review by a court-appointed Special Master,
who is holding a series of three public hearings.
In a December 16 public hearing to review the Settlement
Agreement, an official of the Kansas City plan expressed
interest in a possible combination with RightCHOICE that would
pay $13.50 per share for the public's Class A shares of
RightCHOICE, and $15.25 per share for the parent company's
Class B shares in a transaction that would be taxable to the
Class A shares and tax free to the Class B shares held by Blue
Cross and Blue Shield of Missouri.
The Kansas City plan did not provide RightCHOICE or
Blue Cross and Blue Shield of Missouri any advance notice of
its intention to suggest a possible business combination at
the public hearing. "Earlier this year, we declined to
pursue the possibility of combining with Blue Cross and Blue
Shield of Kansas City. The Settlement Agreement is integral
to the companies' long-term strategic plan, and its court
approval and implementation are our immediate objectives,"
said John O'Rourke, chairman, president and chief executive
officer of RightCHOICE, and president and chief executive
officer of Blue Cross and Blue Shield of Missouri. "After
implementation of our Settlement Agreement as agreed to with
the state of Missouri, RightCHOICE will be better positioned
to consider combinations with other entities to ensure that
value to all shareholders is maximized. This is consistent
with our agreement with state officials, our strategic plan
and our commitment to serve the interests of our subscribers
and all of our shareholders, which would then include the
proposed Missouri Foundation for Health."
The Special Master was appointed by Judge Brown to evaluate
the proposed Settlement Agreement and report to the trial
court. The Special Master stated at the December 16 public
hearing that he is not entertaining offers to purchase
RightCHOICE or Blue Cross and Blue Shield of Missouri. He
permitted Blue Cross and Blue Shield of Kansas City to testify
only as part of his review of various valuation issues related
to the Settlement Agreement. He is holding a series of three
hearings to gather evidence relative to the details of the
Settlement Agreement. The final hearing is scheduled for
Tuesday, December 22, 1998.
SAFE HARBOR STATEMENT
"Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995. Estimates and other statements
set forth herein that are not historical facts are forward-
looking statements that involve risks and uncertainties.
These risks and uncertainties include, but are not limited to:
the possibility that court approval of the final settlement
agreement, referenced above, that would resolve the
outstanding litigation and regulatory issues between the state
and RightCHOICE would not be obtained, or if obtained, could
include conditions that are not acceptable to the parties; the
possibility that all remaining contingencies and conditions to
the parties' obligations to effect the proposed settlement
transaction would not be met or otherwise satisfied;
governmental and regulatory action or legislation; pending
litigation; actions by the Blue Cross and Blue Shield
Association relating to the license to use the Blue Cross and
Blue Shield names, trademarks and service marks; market
competition and consolidation; escalating health care costs;
dependence on sales to individuals; recontracting efforts and
potential of non-renewal of subscriber and provider
agreements; voting control by the parent company; variability
of operating results and stock price; and additional factors
and other risks detailed in the company's Securities and
Exchange Commission filings.
RightCHOICE Managed Care Inc. and its parent company, Blue
Cross and Blue Shield of Missouri, are the largest providers
of health care benefits in Missouri.
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