NEW YORK (AP) -- Health website operator WebMD said Monday that billionaire investor Carl Icahn, its largest shareholder, is selling his entire stake in the company back to WebMD.
The company said it will pay $177.3 million, or $32.08 per share, to buy back the 5.5 million shares held by Icahn and his affiliates. That matches the stock's Friday closing price. WebMD expects the deal to close Monday.
According to FactSet Icahn controlled a 12.1-percent stake in WebMD. Once the deal is complete, the hedge fund manager Kensico Capital Management will be the company's largest shareholder.
WebMD said it has bought back 10.8 million shares since the end of June and will have 40.4 million shares of stock on the market after it buys back Icahn's shares. The New York company said it will have $54 million remaining on its share repurchase authorization.
WebMD Health Corp. shares picked up $1.70, or 5.3 percent, to $33.78 in morning trading.
Icahn became the biggest shareholder in WebMD in November 2011, when he paid $103.4 million to get a 9.5-percent stake in the company. He later boosted his stake to 13 percent.
When Icahn invested in WebMD its shares had lost almost half their value in six months. At the time, the company was reported to be in talks to sell itself to a private equity firm. The stock continued to struggle as WebMD dealt with lower-than-expected revenue brought on by delayed and canceled projects, reduced spending by drug companies and consumer products makers that weighed on revenue, and greater competition from social networking sites.
Icahn opposed a sale, saying WebMD should repurchase $1 billion in company stock instead. The move would have reduced the number of WebMD shares on the market, increasing the company's per-share earnings and returning cash to shareholders. WebMD ultimately didn't find a buyer, saying the offers it received were below its current share price.
The stock has more than doubled in the last year as the company shook up its management and its business recovered.
- Information Technology
- Carl Icahn