ST. LOUIS (AP) _ WellPoint Health Networks Inc., a California-based managed health care company, is buying RightChoice Managed Care Inc. for about $1.3 billion in cash and stock, the companies said Thursday.

St. Louis-based RightChoice has 2.8 million members and is the largest managed-care company in Missouri. It said its majority shareholder, the Missouri Foundation for Health, approves of the deal.

WellPoint, based in Thousand Oaks, Calif., covers 9.8 million medical and 42 million specialty members in several states.

The foundation, along with other shareholders, will receive $66 a share in cash or about .62 shares of WellPoint stock for every RightChoice share. That's a 46 percent premium over RightChoice's closing price of $45.11 on Wednesday.

WellPoint fell more than 5 percent, or $5.62 a share, to close at $101.50 in trading Thursday on the New York stock exchange, where RightChoice shares climbed 33 percent, or $15.40 a share, to close at $62.10.

RightChoice was created in 1994 as a for-profit division from most of the assets of Blue Cross and Blue Shield of Missouri, sparking a six-year legal fight with the Missouri Insurance Department and Attorney General Jay Nixon that was settled out of court last January.

That settlement created the independent Missouri Foundation for Health, designed to take over Blue Cross' role of providing health care to Missouri's poor. The foundation received 80 percent ownership of RightChoice's common stock, but restrictions were imposed that kept the foundation from influencing day-to-day management of RightChoice.

The foundation, which currently owns 57 percent of RightChoice, did retain the right to approve or veto any bid to purchase of the company and will make about $733 million when the merger closes.


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