Filed by PacifiCare Health Systems, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: PacifiCare Health Systems, Inc.
Commission File No. 001-31700
PACIFICARE HEALTH SYSTEMS ANNOUNCES AGREEMENT TO MERGE WITH UNITEDHEALTH GROUP
CYPRESS, Calif. - July 6, 2005 - PacifiCare Health Systems Inc. (NYSE: PHS)
today announced it has reached a definitive agreement to merge with
UnitedHealth Group (NYSE: UNH), a diversified health services company that
provides products and services to more than 55 million Americans, for a
combination of cash and stock.
The combination will create a diverse health care enterprise focused on making
a broad range of quality, affordable and easy-to-use health care services
available nationwide.
Upon completion of the merger, PacifiCare will operate as a wholly owned
subsidiary of UnitedHealthcare. Completion of the merger is subject to
regulatory approvals, approval by PacifiCare shareholders and other customary
conditions.
"This merger joins together two highly complementary companies with
significant capabilities and a demonstrated commitment to serving diverse
constituencies and expanding options for the uninsured," said Howard
Phanstiel, chairman and chief executive officer of PacifiCare Health Systems.
"We believe combining UnitedHealth Group's national health service
capabilities with PacifiCare's brand prominence and deep relationships in the
Western United States will improve upon our nation's health care system and
enable it to better respond to the needs of all Americans."
Under the terms of the agreement, PacifiCare shareholders will receive
UnitedHealth Group stock at a fixed exchange ratio of 1.10 shares for each
PacifiCare share, plus $21.50 in cash per PacifiCare share. The total
consideration for the transaction is a combination of approximately 111.6
million shares and $2.2 billion in cash.
Phanstiel continued: "Over the past several years, we have focused on
strengthening our core operations while providing innovative new solutions to
today's health care challenges. We have now reached a point where it makes
sense for PacifiCare to join with a strong national partner that can help us
reach the next level in leveraging technology and scale to offer a broad range
of competitive products and services that improve the affordability and
quality of health care.
"Our employees should be proud of what we have achieved and excited about our
expanded growth potential as part of UnitedHealth. Also, we believe our
shareholders benefit by receiving strong immediate value as well as an ongoing
stake in an outstanding health and well being company committed to making
health care better for consumers.
"PacifiCare is best known for its strong focus on senior health care, its
quality-measurement systems and its specialty companies. UnitedHealth has an
outstanding track record of industry leadership in the areas of access,
affordability and clinical quality and joins PacifiCare as a leader in
Medicare program innovation. Both companies recognize the necessity of
creating tailored health care solutions that improve cost-effective access to
quality care for all Americans. With the addition of UnitedHealth's national
scope, strong operating platform and advanced technological capabilities,
together we will be able to progress more quickly toward achieving that
fundamental goal," Phanstiel concluded.
This partnership will result in significant advantages for employers and
consumers, especially seniors, by making health care more affordable and
creating a nationwide provider of Medicare services. It will provide seniors
with nationwide access to physicians, consistent service across geographic
regions, and a focus on best practices that include less-expensive
prescription drugs, innovative disease management and services for the frail
elderly.
In addition, PacifiCare's PPO, ASO and small-group customers will have
significantly more choices as a result of UnitedHealth's national network of
more than 460,000 doctors and other health care professionals and 4,500
hospitals, which will help members avoid more expensive "out-of-network"
costs.
Also, physicians and other health care professionals as well as PacifiCare
customers will benefit from access to UnitedHealth's Centers of Excellence and
its investment of more than $2 billion in technological enhancements that have
resulted in significantly lower costs for consumers, and provided efficient,
state-of-the-art claims-handling capabilities.
Conference Call
- ---------------
Phanstiel will participate in a joint conference call with members of
UnitedHealth Group management this afternoon to further discuss the strategic
and financial aspects of this combination. Details are as follows:
Time: 5 p.m. EDT
Domestic Dial-in: 800-515-2563
International Dial-in: 706-679-5262
Pass Code: None
Additionally, the conference call will be broadcast live on UnitedHealth
Group's Web site at http://www.unitedhealthgroup.com/. A replay will be
available beginning at 12 a.m. EDT, July 7, until 12 p.m. EDT, July 10, 2005.
The replay can be accessed by dialing 800-642-1687 (domestic) or 706-645-9291
(international) and using pass code 7683676.
About the Companies
- -------------------
PacifiCare Health Systems is one of the nation's largest consumer health
organizations with nearly 3.2 million health plan members and approximately
11.3 million specialty plan members nationwide. PacifiCare offers individuals,
employers and Medicare beneficiaries a variety of consumer-driven health care
and life insurance products. Specialty plan operations include behavioral
health, dental and vision, and complete pharmacy benefit management through
its wholly owned subsidiary, Prescription Solutions. More information on
PacifiCare Health Systems is available at http://www.pacificare.com/.
UnitedHealth Group (http://www.unitedhealthgroup.com/) is a diversified health
and well-being company dedicated to making health care work better.
Headquartered in Minneapolis, Minn., UnitedHealth Group offers a broad
spectrum of products and services through six operating businesses:
UnitedHealthcare, Ovations, AmeriChoice, Uniprise, Specialized Care Services
and Ingenix. Through its family of businesses, UnitedHealth Group serves
approximately 55 million individuals nationwide.
Important Merger Information
- ----------------------------
In connection with the proposed transactions, UnitedHealth Group and
PacifiCare intend to file relevant materials with the Securities and Exchange
Commission (SEC), including one or more registration statement(s) on Form S-4
that will contain a prospectus and proxy statement. BECAUSE THOSE DOCUMENTS
WILL CONTAIN IMPORTANT INFORMATION, INVESTORS AND HOLDERS OF PACIFICARE COMMON
STOCK ARE URGED TO READ THEM, IF AND WHEN THEY BECOME AVAILABLE. When filed
with the SEC, they will be available for free (along with any other documents
and reports filed by UnitedHealth Group and PacifiCare with the SEC) at the
SEC's Web site, http://www.sec.gov/. In addition, investors and PacifiCare
stockholders may obtain free copies of the documents filed with the SEC by
PacifiCare by directing a written request to PacifiCare Health Systems, Inc.,
5995 Plaza Drive, Cypress, CA 90630, Attention: Investor Relations.
PacifiCare and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the holders of PacifiCare
common stock in connection with the proposed transactions. Information about
the directors and executive officers of PacifiCare is set forth in the proxy
statement for UnitedHealth Group's Annual Meeting of Stockholders, which was
filed with the SEC on April 13, 2005. Investors may obtain additional
information regarding the interest of such participants in the proposed
transactions by reading the prospectus and proxy solicitation statement if and
when it becomes available.
Forward-Looking Statements
- --------------------------
This news release may contain statements, estimates or projections that
constitute "forward-looking" statements as defined under U.S. federal
securities laws. Generally the words "believe," "expect," "intend,"
"estimate," "anticipate," "could," "may," "project" and "will" and variations
thereof or similar expressions identify forward-looking statements, which
generally are not historical in nature. These forward-looking statements are
based on current expectations and projections about future events. By their
nature, forward-looking statements are not guarantees of future performance or
results and are subject to risks and uncertainties that cannot be predicted or
quantified and, consequently, actual results may differ materially from our
historical experience and our present expectations or projections. A list and
description of some of the risks and uncertainties can be found in our reports
filed with the Securities and Exchange Commission from time to time, including
our annual reports on Form 10-K, quarterly reports on Form 10-Q and current
reports on Form 8-K. You should not place undue reliance on forward-looking
statements, which speak only as of the date they are made. Except to the
extent otherwise required by federal securities laws, we do not undertake to
publicly update or revise any forward-looking statements.
________________________________________________________________________
For more information please contact:
Tyler Mason
PHS Media Relations
(714) 226-3530
tyler.mason@phs.com
Dan Yarbrough
PHS Investor Relations
(714) 226-3540
dan.yarbrough@phs.com