HLTH Corp said it will merge into its unit WebMD Health Corp in a cash-and-stock deal worth about $2.31 billion.
The deal values HLTH shares at a premium of 26 %, based on Wednesday's closing price of $10.05. HLTH shares were trading up more than 22 % at $12.30 Thursday on Nasdaq.
Under the terms of the deal, each HLTH share will be exchanged for 0.1979 shares of WebMD common stock and $6.89 in cash.
The merger is expected to curtail WebMD's share count by 20 % and capitalize WebMD with about $700 million in cash and investments.
The deal will be funded by cash and proceeds from HLTH's anticipated sale of its ViPS and Porex units.
Separately, HLTH stated fourth-quarter earnings of 19 cents a share from continuing operations, included a benefit of 10 cents a share. Total revenue fell 36 % to $145.8 million.
Analysts on average were expecting HLTH to earn 20 cents a share, before special items, and revenue of $143.2 million.
WebMD posted a fourth-quarter income from continuing operations of 75 cents a share, including a benefit of 41 cents a share.
Analysts expected the company to gain 28 cents a share, before special items, on revenue of $97.1 million.
WebMD shares were trading up more than 5 % to $30.60 in early morning trade on Nasdaq.