The merger of HLTH Corporation (NASDAQ: HLTH) and WebMD Health Corp. (NASDAQ: WBMD) could make the combined company a target for larger internet companies such as Google Inc. (NASDAQ: GOOG), industry observers said Thursday.
HLTH Corp., of Elmwood Park, N.J., announced Thursday that it would merge into its 84%-owned subsidiary, WebMD, in a $2.3 billion deal. Under terms of the transaction, each outstanding share of HLTH common stock will be converted into 0.1979 shares of WebMD common stock and $6.89 in cash. The deal, which values each HLTH share at $12.63, a 26% premium to Wednesday's closing price on the Nasdaq Stock Market, will eliminate both the controlling class of WebMD stock held by HLTH and WebMD's existing dual-class stock structure.
"It's still modest relative to what those actual properties could fetch but one thing that existing HLTH shareholders have to consider is things are cleared for a potential takeout," said Anthony Petrone, medical technology analyst at Maxim Group LLC in New York.
