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Biotech / Medical : Oxford Health Plan (OXHP) -- Ignore unavailable to you. Want to Upgrade?

To: william liao who wrote (927)	2/6/1998 11:29:00 PM
From: Tom Hua	Read Replies (1) \| Respond to of 2068

NEW YORK -- The stock of Oxford Health Plans Inc. rose 17% Friday on news that prominent Wall Street investor Michael Price has bought a 5.5% stake in the troubled health-care concern. Earlier Friday, Mr. Price's Franklin Mutual Advisers Inc. said in a filing with the Securities and Exchange Commission that it now owns 4.33 million Oxford common shares, or a 5.5% stake. Oxford shares surged on the news. They closed Friday at $19.25, up $2.8125 on the New York Stock Exchange. More than 11.6 million shares changed hands, three times the daily average of 3.7 million. But Mr. Price filed his ownership statement in a Schedule 13G, which is used when an investor declares himself to be expressly passive regarding the company. That's not what investors are expecting from Mr. Price, who has gained a reputation as the kind of aggressive shareholder who can bully a company's management into seeing things his way. The so-called short-form Schedule 13G is available to passive investors who own stakes smaller than 20%, and who do not want to file the more lengthy Schedule 13D. Anyone who files a 13G is not allowed to hold the stock for the purpose of changing management or influencing the control of the company that issued the stock. When asked why Franklin Mutual Advisors decided to file a passive 13G for a stake in Oxford rather than a 13D, Franklin Senior Vice President and Portfolio Manager Ray Garea said that the large majority of Franklin's filings are passive. A 13D involves "not just talking to the company, it's a determination to make a change in management or influence the company," Mr. Garea said. "That's not what we do." Mr. Garea said Franklin was attracted by Oxford's "underlying franchise value," noting that it boasts a large membership and substantial market share in the New York area. "Presumably they'll fix their problems and they'll have substantial earnings power," he said. "We think it's very cheap and we expect to make a lot of money on this." Franklin's stake in Oxford adds to its list of investments in managed-care companies, which include PacifiCare Health Systems Inc., Foundation Health Systems Inc., Maxicare Health Plans Inc. and Mid-Atlantic Medical Services Inc. All were 13G filings, except for PacifiCare, which was a 13D, Mr. Garea said. Franklin has been highly critical of PacifiCare's handling of its February 1997 acquisition of FHP International Corp. The managed-care industry has struggled recently with rising medical costs, acquisition integration difficulties and computer-information systems problems. "We try to look beyond those things and [focus on] what can happen there when things that are eminently fixable get fixed," Mr. Garea said. Initial speculation about Mr. Price's purchase of a stake in Oxford was centered on the hope that "he could probably effect change at Oxford for the better," said Cowen & Co. analyst Edward Kroll. However, he added that "now that we know it's passive ... you'll probably see the stock back down there."