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Healthsource logo
March 6, 1997
To the Shareholders of
Healthsource, Inc.:
We are pleased to inform you that on February 27, 1997, Healthsource, Inc.
("Healthsource" or the "Company") entered into an Agreement and Plan of Merger
(the "Merger Agreement") with CIGNA Corporation ("CIGNA") and CHC Acquisition
Corp. ("Purchaser"), an indirect, wholly-owned subsidiary of CIGNA, pursuant to
which Purchaser has today commenced a tender offer (the "Offer") to purchase all
of the outstanding shares of common stock, $.10 par value per share (the
"Shares"), of the Company for $21.75 per Share in cash. Under the Merger
Agreement, following the Offer, Purchaser will be merged (the "Merger" and,
together with the Offer, the "Transaction") with and into the Company and all
Shares not purchased in the Offer (other than Shares held by CIGNA, Purchaser or
the Company, or Shares held by dissenting shareholders) will be converted into
the right to receive $21.75 per Share in cash.
Your Board of Directors has unanimously approved the Merger Agreement, the
Offer and the Merger and has determined that the Offer and the Merger are fair
to and in the best interests of Healthsource's shareholders. The Board
unanimously recommends that the Company's shareholders accept the Offer and
tender their Shares in the Offer.
In arriving at its recommendation, the Board of Directors gave careful
consideration to a number of factors described in the attached Schedule 14D-9
that is being filed today with the Securities and Exchange Commission,
including, among other things, the opinion of Bear, ▇▇▇▇▇▇▇ & Co. Inc., the
Company's financial advisor, that the Transaction is fair, from a financial
point of view, to the shareholders of Healthsource.
In addition to the attached Schedule 14D-9 relating to the Offer, also
enclosed is the Offer to Purchase, dated March 6, 1997, of Purchaser, together
with related materials, including a Letter of Transmittal to be used for
tendering your Shares. These documents set forth the terms and conditions of the
Offer and the Merger and provide instructions as to how to tender your Shares.
We urge you to read the enclosed materials carefully.
Sincerely,
Payson sig Bagan sig
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D. ▇▇▇▇▇▇ ▇▇▇▇▇, M.D., M.P.H.
President and Chief Executive
Officer Chairman of the Board
[HEALTHSOURCE ADDRESS]
