Primary Holder in WellPoint Plans to Sell Millions of Shares

WellPoint Health Networks in Thousand Oaks, one of California’s largest health insurers, said its biggest shareholder will sell up to $1 billion in stock, reducing its stake to as little as 8.5%.

The California HealthCare Foundation will sell up to 10.35 million shares to the public in an offering that WellPoint expects to be completed this month. It will sell another 2 million shares in a company buyback, which WellPoint will finance by offering $285 million in convertible debt.

The foundation, which now holds about 26.6% of WellPoint’s shares, is a charity that got the stock as part of WellPoint’s conversion from not-for-profit Blue Cross of California into a publicly held company. The foundation has sold shares in three previous offerings as part of an effort to diversify its investments.

WellPoint made the announcement shortly after Standard & Poor’s Corp. said it will add the health insurer to the S&P; 500 Index.

Companies’ shares typically rise when they join the S&P; 500 because many mutual funds that try to mimic the performance of the index must buy the shares. Money managers often are judged on their performance relative to that of the S&P; 500.