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This excerpt taken from the WBMD DEF 14A filed Nov 5, 2008. HLTH
Merger
On February 20, 2008, HLTH and WebMD entered into a Merger
Agreement, pursuant to which HLTH will merge into WebMD
(“HLTH Merger”), with WebMD continuing as the
surviving company. In the HLTH Merger, each outstanding share of
HLTH common stock will be converted into 0.1979 shares of
WebMD common stock and $6.89 in cash, which cash amount is
subject to a downward adjustment as described below
(“Merger Consideration”). The shares of WebMD
Class A Common Stock currently outstanding will remain
outstanding and will be unchanged in the HLTH Merger. The HLTH
Merger will eliminate both the controlling class of WebMD stock
held by HLTH and WebMD’s existing dual-class stock
structure. The terms of the Merger Agreement were negotiated
between HLTH and a Special Committee of the Board of Directors
of WebMD. The Merger Agreement was approved by the Board of
WebMD based on the recommendations of the Special Committee and
by the Board of HLTH.
The cash portion of the Merger Consideration will be funded from
cash and investments at WebMD and HLTH, and proceeds from
HLTH’s anticipated sales of its ViPS and Porex businesses.
As previously announced, HLTH has received significant interest
from potential strategic buyers for both ViPS and Porex and will
be seeking formal offers for these businesses from potential
buyers. The cash portion of the Merger Consideration is subject
to downward adjustment prior to the closing, based on the amount
of proceeds received from the disposition of HLTH’s
investment in certain ARS, which, under the terms of the Merger
Agreement, must be liquidated by HLTH prior to closing of the
HLTH Merger. The Company cannot predict, at this time, the
amount of such downward adjustment. See “Investment in
Auction Rate Securities Backed by Federally Guaranteed Student
Loans” above. If either ViPS or Porex has not been sold at
the time the HLTH Merger is ready to be consummated, WebMD may
issue up to $250,000 in redeemable notes to the HLTH
shareholders in lieu of a portion of the cash consideration
otherwise payable in the HLTH Merger. The notes
WebMD 2007 Annual
Report — Financial Statements Annex
These excerpts taken from the WBMD 10-K filed Feb 29, 2008. HLTH
Merger
On February 20, 2008, HLTH and WebMD entered into a Merger
Agreement, pursuant to which HLTH will merge into WebMD
(“HLTH Merger”), with WebMD continuing as the
surviving company. In the HLTH Merger, each outstanding share of
HLTH common stock will be converted into 0.1979 shares of
WebMD common stock and $6.89 in cash, which cash amount is
subject to a downward adjustment as described below
(“Merger Consideration”). The shares of WebMD
Class A Common Stock currently outstanding will remain
outstanding and will be unchanged in the HLTH Merger. The HLTH
Merger will eliminate both the controlling class of WebMD stock
held by HLTH and WebMD’s existing dual-class stock
structure. The terms of the Merger Agreement were negotiated
between HLTH and a Special Committee of the Board of Directors
of WebMD. The Merger Agreement was approved by the Board of
WebMD based on the recommendations of the Special Committee and
by the Board of HLTH.
The cash portion of the Merger Consideration will be funded from
cash and investments at WebMD and HLTH, and proceeds from
HLTH’s anticipated sales of its ViPS and Porex businesses.
As previously announced, HLTH has received significant interest
from potential strategic buyers for both ViPS and Porex and will
be seeking formal offers for these businesses from potential
buyers. The cash portion of the Merger Consideration is subject
to downward adjustment prior to the closing, based on the amount
of proceeds received from the disposition of HLTH’s
investment in certain ARS, which, under the terms of the Merger
Agreement, must be liquidated by HLTH prior to closing of the
HLTH Merger. The Company cannot predict, at this time, the
amount of such downward adjustment. See “Investment in
Auction Rate Securities Backed by Federally Guaranteed Student
Loans” above. If either ViPS or Porex has not been sold at
the time the HLTH Merger is ready to be consummated, WebMD may
issue up to $250,000 in redeemable notes to the HLTH
shareholders in lieu of a portion of the cash consideration
otherwise payable in the HLTH Merger. The notes would bear
interest at a rate of 11% per annum, payable in kind annually in
arrears. The notes would be subject to mandatory redemption by
WebMD from the proceeds of the divestiture of the remaining ViPS
or Porex business. The redemption price would be equal to the
principal amount of the notes to be redeemed plus accrued but
unpaid interest through the date of the redemption.
Table of Contents
WEBMD
HEALTH CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
Completion of the HLTH Merger is subject to: HLTH and WebMD
receiving required shareholder approvals; a requirement that the
surviving company have an amount of cash, as of the closing at
least equal to an agreed upon threshold, calculated in
accordance with a formula contained in the Merger Agreement;
completion of the sale by HLTH of either ViPS or Porex and the
sale of HLTH’s ARS investments; and other customary closing
conditions. HLTH, which owns shares of WebMD constituting
approximately 96% of the total number of votes represented by
outstanding shares, has agreed to vote its shares of WebMD in
favor of the HLTH Merger. The transaction is expected to close
in the second or third quarter of 2008.
Following the HLTH Merger, WebMD as surviving corporation will
assume the obligations of HLTH under HLTH’s
31/8% Convertible
Notes due September 1, 2025 and HLTH’s
1.75% Convertible Subordinated Notes due June 15, 2023
(“Notes”). In the event a holder of these Notes
converts these Notes into shares of HLTH common stock pursuant
to the terms of the applicable indenture prior to the effective
time of the HLTH Merger, those shares would be treated in the
HLTH Merger like all other shares of HLTH common stock. In the
event a holder of the Notes converts those Notes pursuant to the
applicable indenture following the effective time of the HLTH
Merger, those Notes would be converted into the right to receive
the HLTH Merger Consideration payable in respect of the HLTH
shares into which such Notes would have been convertible.
Table of Contents
Table of ContentsWEBMD HEALTH CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Completion of the HLTH Merger is subject to: HLTH and WebMD receiving required shareholder approvals; a requirement that the surviving company have an amount of cash, as of the closing at least equal to an agreed upon threshold, calculated in accordance with a formula contained in the Merger Agreement; completion of the sale by HLTH of either ViPS or Porex and the sale of HLTH’s ARS investments; and other customary closing conditions. HLTH, which owns shares of WebMD constituting approximately 96% of the total number of votes represented by outstanding shares, has agreed to vote its shares of WebMD in favor of the HLTH Merger. The transaction is expected to close in the second or third quarter of 2008. Following the HLTH Merger, WebMD as surviving corporation will assume the obligations of HLTH under HLTH’s 31/8% Convertible Notes due September 1, 2025 and HLTH’s 1.75% Convertible Subordinated Notes due June 15, 2023 (“Notes”). In the event a holder of these Notes converts these Notes into shares of HLTH common stock pursuant to the terms of the applicable indenture prior to the effective time of the HLTH Merger, those shares would be treated in the HLTH Merger like all other shares of HLTH common stock. In the event a holder of the Notes converts those Notes pursuant to the applicable indenture following the effective time of the HLTH Merger, those Notes would be converted into the right to receive the HLTH Merger Consideration payable in respect of the HLTH shares into which such Notes would have been convertible.
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