WebMD Close to Deal With Private Equity Firms
Four private equity firms are bidding for online medical site WebMD after it quietly put itself up for sale, the New York Post reported Thursday.
KKR and Providence Equity Partners are among the suitors vying for the New York-based internet company, sources said.
WebMD has set Monday as the final bidding deadline, according to two sources close to the situation. One person said WebMD shot down a request to extend the deadline -- an indication that a deal is close at hand.
A WebMD spokeswoman did not return calls for comment. KKR and Providence also didn't respond to requests for comment.
WebMD, whose stock has suffered a steep drop this year, has been seen as a takeover candidate. Savvy investors Carl Icahn and George Soros piled into the company after its shares lost one-third of their value.
Last month, Icahn disclosed in a regulatory filing that he had increased his stake in WebMD to 9.5 percent from 7.9 percent.
The activist investor called on the company to spend $1 billion to buy back its shares as an alternative to a sale to private-equity firms, saying he was not aware of any sales process. He also said WebMD was "undervalued from a long-term perspective."
Last month, WebMD adopted a poison pill giving it the ability to stop Icahn from buying more than a 12 percent stake. Meanwhile, billionaire Soros has amassed a 5.6 percent stake in WebMD through shares and convertible bonds.
WebMD is still the leading provider of health information online. According to the company's stats, it gets more than 100 million monthly visitors, or 95 percent of all adults seeking health info on the web.
But the site is suffering from slowing revenue growth. In July, the company lowered its forecast for full-year revenue to 12 percent, down from 20 percent. In November, it cut its forecast again to four percent growth, causing the stock to swoon.