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Analyst Says Avoid United Wisconsin Services

An analyst from

ABN Amro

recommended that investors steer clear of

United Wisconsin Services


, citing possible problems arising from the company's plan to merge with

Blue Cross & Blue Shield United of Wisconsin


The two companies could have statuatory capital requirement problems, and the move would weaken the ability of shareholders of United Wisconsin to control the company, ABN analyst Peter Costa wrote in a research note.

United Wisconsin, a Milwaukee health maintenance organization, signed a merger agreement with Blue Cross & Blue Shield United of Wisconsin last week. The agreement calls for United Wisconsin to issue 31.3 million new shares and pay $500,000 into the Wisconsin United for Health Foundation.

Shares of United Wisconsin closed unchanged at $3.56 on the

New York Stock Exchange