HLTH Corp. and WebMD Health Corp. will not merge as planned, the companies announced.
Citing the current financial climate, HLTH said in a news release it will retain its 84% ownership in WebMD, which will continue as a subsidiary of the Elmwood Park, N.J.-based company. WebMD, which runs a network of health Web sites including WebMD.com, would have been the surviving company had the merger gone through. By remaining as a business unit, WebMD will have $340 million in cash and investments, with no long-term debt, according to HLTH. In the current economic environment, it is important for a growth company like WebMD not to be encumbered by $650 million in long-term debt that would be coming due in 18 to 36 months, said Martin Wygod, board chairman of both WebMD and HLTH, in a written statement.
HLTH said it also has run into trouble trying to sell Porex, another subsidiary, because buyers cant arrange financing. Sale of that unit was one of the prerequisites to the WebMD merger. -- by Jean DerGurahian