NEW YORK (AP) — Shares of WebMD Health Corp. rose Thursday after the New York Post reported that the health website operator is close to a deal to sell itself.
THE SPARK: The paper said four private equity firms are interested in buying WebMD, including KKR and Providence Equity Partners. Rumors of a sale have surrounded WebMD for the last few weeks, although the company has not confirmed that it is considering any kind of deal. The company did not immediately respond to requests for comment Thursday.
THE BIG PICTURE: WebMD cut its outlook in July and again in November. Its business is being hurt by factors including lower license revenue and reduced marketing spending from consumer-products companies. Billionaire investor Carl Icahn took a 9.5 percent stake in WebMD in November, and his firm, Icahn Capital LP, has said it opposes a sale. WebMD has adopted a “poison pill” shareholder rights plan that would dilute the value of the stock if any company or investor acquires a 12-percent stake in the company.
SHARE ACTION: The New York company’s stock rose $3.14, or 9.1 percent, to $37.75 Thursday. WebMD shares dropped 33 percent between July 18, when it cut its annual guidance, and Nov. 3, the day after it reported its third-quarter results. Since then, the stock is up 21.2 percent.