HLTH Corp. (HLTH) has agreed to merge with WebMD Health Corp. (WBMD) in an all-stock deal.
HLTH currently owns 48.1 million shares of WebMD, or 80% of total equity. WebMD will be the surviving entity after the merger.
As per the agreement, each share of HLTH will be converted into 0.444 share of WebMD class A common stock, while the latter’s class B shares will be retired.
“This transaction will eliminate the inefficiencies associated with having two separate public companies,” said acting CEO of HLTH Martin J. Wygod. “Completion of this merger will significantly increase the liquidity of WebMD shares.”
The deal also requires WebMD, which has no long-term debt, to assume HLTH’s 3.125% convertible notes and 1.75% convertible subordinated notes, having a combined value of $515 million.
The two companies agreed to merge last year as well, however the onset of the global financial turmoil played spoilsport and the deal was called off in October.
HLTH’s shareholders have already agreed to vote in favor of the merger. The deal is expected to be completed in the third or fourth-quarter of this year.
Shares of HLTH have jumped more than more than 8% so far today on heavier-than-usual volume of approximately 3 million, against the average daily volume of about 982,000.
WBMD shares have advanced 4% on volume of approximately 153,000, which is well above the average daily volume of about 49,000.
“HLTH” Free Stock Analysis: Buy? Sell? Hold?
“WBMD” Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research
