Healthaxis, BPO Management amend merger agreement, extending termination date

By Lisa Kerner

Charlotte, N.C., Oct. 27 - BPO Management Services, Inc. amended its agreement and plan of merger with Healthaxis Inc.

Changes were made to the exchange ratios used to determine the amount of Healthaxis securities that will be issued in exchange for certain BPO securities, according to a form 8-K filed with the Securities and Exchange Commission.

Under the amended agreement, current BPO securityholders will own approximately 75% of the surviving public company immediately following the merger's close, with current Healthaxis securityholders owning the remaining 25%.

The amendment also changed the termination date to Jan. 31 from Dec. 31, the filing said.

BPO and Healthaxis increased the termination fee to $1 million from $500,000. The fee is payable by either company under certain specified circumstances.

It was previously reported that Healthaxis agreed to become the health-care division of BPO through a reverse merger between the two companies.

Each share of BPO common stock will be exchanged for 0.3393 shares of Healthaxis common stock.

Shares of BPO preferred stock and other BPO securities will be exchanged for a mix of shares of Healthaxis common stock, preferreds and other securities based on various fixed exchange ratios, a prior BPO news release said.

Healthaxis, an Irving, Texas, health-care payer solutions provider, said it will effect a reverse stock split in connection with the transaction's closing, which was initially expected during the fourth quarter of 2008.

Based in Anaheim, Calif., BPO is a provider of business process outsourcing services focused on on-demand human resources, information technology, enterprise content management and finance support.

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