The Indianapolis News from Indianapolis, Indiana • 62

iir E-16 FRIDAY, FEBRUARY 7, 199? THE INDIANAPOLIS NEWS ii. i--, Anthem's with hospita Anthem takes second look at its business ties where ny els may send ma Credit Suisse First Boston to help It analyze the Acordia rela-J tionship. Credit Suisse has been asked to explore the possible sale ofVi Acordia's property and casualty brokerage business, which ac-- counts for about half of dia's revenues. Credit Suisse also will consider reorganizing' Acordia's health-Insurance70 business. Acordia's board last week created a special committee independent directors to evalu-'-; ate any proposals involving An- them, the company said.

By Eileen Ambrose STAFF WRITER Citing changes in the health care Industry. Indianapolis companies Anthem Inc. and Acordia Inc. announced Thursday that they are re-evaluating their business relationship. Anthem, a mutual Insurance company, owns 67 percent of the publicly traded Acordia, the nation's seventh-largest insurance brokerage.

Acordia also sells and administers health-insurance products for Anthem, primarily In Indiana and Kentucky. Anthem recently hired the investment banking firm of will receive full reimbursement, according to Anthem, which sells Blue Cross and Blue Shield health plans in Indiana and other states. Patients whose conditions are deemed non-life-threatening, however, will have to pay extra. The amount varies from hospital to hospital, but In some Anthem plans, a co-payment could go up 10 percent. Hospital officials weren't sure how many patients would be affected, but an Anthem official estimated it would be "In the low See HOSPITALS Page 17 employers and patients.

"What we're doing Is responding to our customers' demands for the highest-quality, lowest-cost health care we can arrange for them," said Anthem spokesman Donald Stengele. Caught in the middle of this dispute are enrollees of Anthem's Key Health Plan, Anthem Health Plan, Preferred Care of Indiana, Premium Preferred Networks, Indiana Health Network, and several traditional plans offered by Anthem. Patients who visit the hospitals for "life-threatening" conditions ees in Its health plans that, as of March 1, they will pay "out-of-network penalties" for care they receive at the four hospitals. Those hospitals are: Jackson County Memorial Hospital in Seymour, William S. Major Hospital in Shelbyville, Reid Memorial Hospital In Richmond and Wells Community Hospital in Bluffton.

"Anthem Just asked us to do things that would severely threaten our long-term viability," said Tony Lennen, president of William S. Major Hospital in Shelbyville. Anthem officials say the company must respond to demands by By Chris O'Malley STAFF WRITER A battle between Anthem Inc. and four small-town hospitals could force thousands of customers to drive elsewhere for nonemergency care or pay penalties. The hospitals and the Indianapolis Insurance company are involved In contentious negotiations over contracts that have expired or will expire by the end of February.

Contract talks have bogged down, and Anthem, In letters mailed last week, informed enroll- See ANTHEM Page 17 rasps, CVS OKs deal to acquire Revco .1 DOW NYSE ej 412.43 2.54 Transaction value put at $2.8 billion 7 J. 'fkki v. i-." Associated Press AMEX 586.85 785.99 1.82 5.84 NASDAQ 1356.31 9.91 Staff Photo Kat Wade ANOTHER CHANGE: The One Indiana Square building at Pennsylvania, Ohio and Delaware streets is part of a new venture. One Indiana Square gets new deal Ownership the same but not management changed, making property values plummet and leaving investors holding too much debt. The dry spell caused former owners of the 37-story building their share of problems.

Home to offices of First Chicago NBD Bank, the tower was caught in a court fight that pitted Travelers against its former owner. One Indiana Square Associates, for months. One Indiana was a partnership affiliated with Chicago's JMB Realty. The building for years had gone without renovation, and vacancies grew. Travelers filed a lawsuit" in 1995 in Marlon Superior Court seeking $74 million it said One Indiana owed on ja 1986 loan.

Travelers later swallowed $45 million of the debt and took the building back after an auction early last year failed to attract any buyers. Chicago's Sears Tower. Tishman Speyer spokesman Andrea Ber-gofin said she did not know when Buck will hand over the operation, but the move will come soon, she said. Calls to Buck executives were not returned. Valued at $600 million, the portfolio of 10 properties in the new Travelers-Tish-man Speyer venture includes buildings from California to Massachusetts.

They were spun off from a Travelers affiliate to become part of the new venture. Travelers, of Hartford, is keeping its hand In the operation, but much of the managing, renovating and leasing of the properties will be done by Tishman Speyer. The company plans to use the portfolio to acquire more properties, Bergofin said. Institutional investors such as Travelers have trickled back to real estate ownership in recent years following a long dry spell in the late 1980s. It came after tax laws By Steve Kukolla STAFF WRITER The One Indiana Square building Downtown has become involved in a new real estate venture involving its owner, Travelers Insurance and the New York real estate firm of Tishman Speyer Properties.

The building that once was Indiana's tallest will soon have new day-to-day management but not new ownership, a rumor that had made Its way around real estate circles in the weeks before Thursday's announcement. It also apparently means the exit of Chicago's John Buck which was hired last summer to manage the property. Buck is known for renovating such landmarks as Dana to build supplier for Toyota in Kentucky OWENSBORO.Ky. Dana Corp. says it will build a $20 million auto-supply plant in It will produce truck frames for the Toyota plant being built in southwestern Indiana.

The Toyota factory will manufacture T-100 trucks. Checks are in the mail INDIANAPOLIS Bank One Indianapolis customers who are owed extra interest from "comforter" certificates of deposit are expected to get their money later this month. The payments were to be made at the end of January, but it took the bank longer than expected to collect the names of those customers due money. Stock offering expands INDIANAPOLIS Signature Inns Inc. said Thursday that the underwriters of its recent offering of cumulative convertible preferred stock have exercised their option to purchase an additional 56,000 shares to cover over-allotments.

That brings the offering size to 2.256 million shares and $45. 1 million. CFM Majestic to relocate U.S. operations to Indiana HUNTINGTON, Ind. CFM Majestic Inc.

of Canada will consolidate support operations of its three U.S. subsidiaries at Majestic Products Inc. in Huntington. Administrative, marketing and financial functions of Majestic, Vermont Castings Inc. of Bethel, Vt, and Timberline Gas Logs Inc.

of Orange County, will combine, adding 20 to 25 employees to Majestic. CLEVELAND CVS Corp. and Revco D.S. Inc. have reached agreement for CVS to acquire Revco In a stock transaction valued at an estimated $2.8 billion' The deal, including the assumption of about $900 million of Revco debt, was approved unanimously by boards of both compja-nles, it was announced today.

The combination would create the nation's largest drugstore chain, based on store count, with approximately 4.000 In 24 states and the District of Columbia. Revco, with more than 300 stores in Indiana, doubled its size three years ago when it bought Indiana-based Hook-SupeRx IncJ The combined CVS-Revco would rank second In annual re tall drug store revenues in 1997 with $13 billion, the companies said. The acquisition is subject to approval by shareholders of botjj companies and other customary closing conditions. It is expected be completed by mid-year. CVS will combine with Revco In an exchange of stock that is expected to qualify as a pooling -of interests transaction and be tax free to Revco shareholders.

Stanley P. Goldstein, chairmaq and chief executive officer of CVS, said, "We already had the size anj scope and the operational and nancial strength needed to contfci; ue to do very well, but to meet op? long-term growth and profit objej tives and to continue to be recqgr nized as one of the best retail growth companies, we felt we should explore opportunities to celerate our growth and enhance our strengths." Revco's shares closed Thursday at $38, up 87.5 cents on the New York Stock Exchange. CVS closed at $44, down 25 cents. D. Dwayne Hoven, president and chief executive officer Revco, said the Revco board deter-j mined that the merger was In ths best interests of shareholders.

After completion of the transaction, CVS will open about 300 new or relocated stores per year. The combined company will be" called CVS and will be based fc Woonsocket, R.I.. where CVS ffe currently based. The Twinsburg headquarters of Revco will be phased out over time, but few other workforce reductions are expected, the companies said. The Twinsburg offices have about 1,100 employees.

CVS is currently the nation's fifth largest drugstore chain by store count and sales volume, operating 1,409 stores in 14 states and the District of Columbia with annual sales of $5.5 billion 1996. Revco is currently one of the nation's largest retail drugstore chains with expected annual sales of about $6 billion in its current fiscal year, which ends May 3Ti The company operates 2,600 stores In 17 states. Donaldson Lufkin Jenrette Inc. and Credit Suisse First Bostdn are advising CVS. while Wasseri stein Perella'( Co.

Is advlstng Revco. Business leaders criticize Clinton's budget proposal Unemployment rate in January rose to 5.4 Associated Press WASHINGTON The nation's unemployment rate crept up to 5.4 percent In January despite moderate growth in business payrolls, particularly at temporary help firms. The Labor Department today described the rate Increase, from Indiana's December rate was 3.4 percent Indiana's seasonally adjusted unemployment rate in December was 3.4 percent According to a monthly survey of Indiana employers, payroll employment in December totaled 2,832,600, up 4,100 from December 1995. 5.3 percent in December, as essentially unchanged. Still, it was the highest rate since July.

During the last five months of 1996, the rate shifted between 5.3 percent and 5.2 percent. Associated Press NEW YORK Business leaders saw more to fume about than to cheer in President Clinton's proposed budget, even doubting his sincerity in erasing the deficit by 2002. But what drew the most ire were his plans to offset the bulk of a $98.4 billion tax cut for the middle class over six years by raising more taxes from businesses and the investment community. "We don't look fondly on tax increases In general," said Bruce Josten of the U.S. Chamber of Commerce.

"We disdain diverting money to fund costly and Ineffective political programs." Clinton's $1.69 trillion budget, unveiled Thursday, was assailed by businesses as an attempt to score political points at their expense. However, the president was praised for a plan to continue tax breaks for businesses that help pay education expenses for employees and one to provide a new break encouraging U.S. companies to export computer software. But generally, the business community slammed him for spending increases they thought were unnecessary and for usine A big issue was a plan to tax a bigger portion of income earned overseas by U.S. companies.

Business leaders said that was counterproductive to healthy economic growth. "It certainly doesn't make a lot of sense to penalize one of the success stories in the economy by raising taxes on exports," said Paul Huard of the National Association of Manufacturers. "Exports provide a lot of Jobs," he said. "This proposal takes a bad code and makes it worse, and all it's designed to do Is scrounge up a little more revenue. It's robbing-Peter-to-pay-Paul stuff.

This is political stuff." But there were enough proposals in the budget to unnerve businesses big and small, from powerful tobacco corporations to family-owned businesses such as Bison Gear and Engineering Corp. in St. Charles, Josten and others also pointed to new spending programs, tax breaks for individuals and a lack of plans for fixing Medicare and Social Security. "Credit for college is a new entitlement program for the middle-class costing billions of dollars," Josten said. "Having new entitlements obviously presents some problems." a Seatmaker strike shuts 3 Ford plants DETROIT A strike at a company that makes car seats has shut down production at three Ford Motor Co.

plants, idling 6,800 workers in Michigan and Ohio. Ford closed the plants Thursday as negotiators for the seat supplier, Johnson Controls and the United Auto Workers sought to resolve the walkout. The Increase in payroll jobs 271,000 was the best since August and a little stronger than many economists anticipated. But the Labor Department said it was exaggerated by the effect of last winter's heavy snows on statistical adjustments designed to smooth out the Impact of seasonal weather patterns on the Job numbers. And, the department said a good portion of the Job gain 82,000 came at temporary help services.

The figures calmed some lnflationllltters on Wall Street, where stocks and bonds rallied. economlaprojections to erase the T- p1 opumisuc econ From staff and We reports deficit by 2002 optimistic deficit hv 2009 A.