NEW YORK, Aug. 7, 2017 /PRNewswire/ -- WebMD Health
Corp. (NASDAQ: WBMD) (the "Company") today provided notice that,
pursuant to the terms of:
- an indenture, dated January 11,
2011 (the "2018 Indenture") governing its 2.50% Convertible
Notes due 2018 (the "2018 Notes"),
- an indenture, dated November 26,
2013 (the "2020 Indenture") governing its 1.50% Convertible
Notes due 2020 (the "2020 Notes"), and
- an indenture, dated June 1, 2016
(the "2023 Indenture", and together with the 2018 Indenture and the
2020 Indenture, the "Indentures" and each, an "Indenture")
governing its 2.625% Convertible Notes due 2023 (the "2023 Notes",
and together with the 2018 Notes and the 2020 Notes, the
"Notes"),
it anticipates that a Make-Whole Fundamental Change, as such
term is defined in the 2020 Indenture and the 2023 Indenture, and a
Make Whole Change of Control, as such term is defined in the 2018
Indenture, may occur on or after September
7, 2017, as a result of the Tender Offer (as defined
below). Such notice was filed as an exhibit to Schedule 14D-9
filed with the Securities and Exchange Commission (the "SEC") on
August 7, 2017.
Merger Agreement and Tender Offer
As previously announced, on July 24,
2017, the Company entered into an Agreement and Plan of
Merger (the "Merger Agreement") among MH Sub I, LLC, a Delaware limited liability company (the
"Parent"), Diagnosis Merger Sub, Inc., a Delaware corporation and a wholly-owned
subsidiary of Parent (the "Purchaser"), and the Company, providing
for (i) a tender offer to be commenced by the Purchaser on or about
August 7, 2017 (the "Tender Offer"),
to acquire all shares of common stock of the Company, par value
$0.01 per share (the "Common Stock")
that are outstanding other than certain excluded shares, at a price
of $66.50 per share, net to the
seller in cash (such amount or any higher amount per share that may
be paid pursuant to the Tender Offer, the "Offer Price") and (ii)
as soon as practicable after the successful completion of the
Tender Offer, the merger (the "Merger") of the Purchaser with and
into the Company, with the Company continuing as the surviving
company, and each share of Common Stock that is not tendered and
accepted pursuant to the Tender Offer, other than certain excluded
shares, will be cancelled and converted into the right to receive
an amount in cash equal to the Offer Price.
Supplemental Indentures
In accordance with Section 10.12 of the Indentures, the Company
intends to enter into supplemental indentures with respect to the
Indentures, pursuant to which the right to convert each
$1,000 principal amount of the Notes
will be changed into a right to convert such principal amount into
an amount of cash equal to the Conversion Rate (as defined in the
Indentures) in effect on the conversion date, multiplied by the
Applicable Price (as defined in the Indentures).
Notice of Anticipated Make-Whole Fundamental Change / Make
Whole Change of Control and Adjustment to Conversion
Rate upon Conversion upon a Make-Whole Fundamental Change / Make
Whole Change of Control
The completion of the Merger will constitute a Make-Whole
Fundamental Change under the 2020 Indenture and 2023 Indenture, and
a Make Whole Change of Control under the 2018 Indenture. The
Company therefore anticipates that a Make-Whole Fundamental Change
or a Make Whole Change of Control, as applicable, will occur on or
after September 7, 2017, as a result
of the successful completion of the Merger. Under the Indentures,
if a holder surrenders its Notes for conversion during the period
commencing 20 days prior to the anticipated effective date of the
Make-Whole Fundamental Change or Make Whole Change of Control, as
applicable, and ending 20 days after the actual effective date of
the Make-Whole Fundamental Change or Make Whole Change of Control,
as applicable (such period, the "Make-Whole Fundamental Change
Period"), the Company will increase the conversion rate for the
Notes surrendered for conversion during such period by a number of
additional shares of Common Stock (the "Additional Shares") in
accordance with the Indentures as set forth below.
As of the date hereof, the Conversion Rates for the Notes are as
follows:
- 2018 Notes: 15.5854 shares of Common Stock per $1,000 principal amount of Notes;
- 2020 Notes: 19.0695 shares of Common Stock per $1,000 principal amount of Notes; and
- 2023 Notes: 11.5389 shares of Common Stock per $1,000 principal amount of Notes.
As the holders of Common Stock will receive solely cash
consideration per share of Common Stock equal to the Offer Price in
connection with the Tender Offer and the Merger, the Applicable
Price, as used in the Indentures, will equal the Offer Price. The
number of Additional Shares will be determined by reference to the
respective make-whole table set forth in the notices and based upon
the Applicable Price and the effective date of the Merger (the
"Effective Date").
Solely for illustrative purposes under Section 10.05 of the
Indentures, based upon a hypothetical Effective Date of
September 7, 2017 and the anticipated
Applicable Price of $66.50 per share
of Common Stock, the adjusted Conversion Rate for the Notes is
expected to be as follows:
- 2018 Notes: 16.1352 shares of Common Stock per $1,000 principal amount of Notes;
- 2020 Notes: 21.0009 shares of Common Stock per $1,000 principal amount of Notes; and
- 2023 Notes: 11.5389 shares of Common Stock per $1,000 principal amount of Notes, which reflects
no Conversion Rate adjustment.
These adjusted Conversion Rates apply only to Notes surrendered
for conversion during the Make-Whole Fundamental Change
Period. It is expected that holders of the 2023 Notes
will not be entitled to any Additional Shares, and their Conversion
Rate will therefore not be adjusted, because the
anticipated Applicable Price of $66.50 per share of Common Stock is lower than
the Applicable Price threshold at which holders of the 2023 Notes
would be entitled to Additional Shares for conversions during the
Make-Whole Fundamental Change Period. This threshold is currently
$66.66 per share of Common
Stock.
The calculation of the anticipated adjusted Conversion
Rates set forth above is contingent upon a hypothetical Effective
Date of the Merger of September 7,
2017, cash consideration paid per share of Common Stock in
connection with the Merger of $66.50
and surrender of Notes for conversion during the Make-Whole
Fundamental Change Period. If the Merger is not consummated, the
holders of Notes surrendered for conversion will not be entitled to
the Additional Shares and will not be able to reverse the
conversion of their Notes. In addition, even if the Merger is
consummated, the number of Additional Shares will vary from the
amount reflected above if the actual Applicable Price
and/or the Effective Date of the Merger vary from those used for
the calculation above.
If the Merger is Consummated, Company Obligation to Make a
Repurchase Offer to All Holders
Pursuant to Section 3.01 of each Indenture, if a Fundamental
Change, as defined in the 2020 Indenture and the 2023 Indenture, or
a Change in Control, as defined in the 2018 Indenture, occurs at
any time before the maturity date of the Notes, each holder of
Notes will have the right at such holder's option to require the
Company to repurchase all of such holder's Notes (or a portion
thereof which is $1,000 in principal
amount or any positive integral multiple thereof), on a date (the
"Fundamental Change Repurchase Date") that is 30 business days
after the date the Company delivers the Fundamental Change
Notice (as defined in the 2020 Indenture and 2023 Indenture) or the
Change in Control Notice (as defined in the 2018 Indenture) in
accordance with Section 3.01 of the applicable
Indenture. The Company will be required to repurchase all of
such holder's Notes at a price, payable in cash, equal to one
hundred percent (100%) of the principal amount of the Notes to be
so repurchased (the "Repurchase Price"), plus accrued and unpaid
interest thereon, if any, to, but excluding the Fundamental Change
Repurchase Date.
If the Company makes an offer to repurchase the Notes as a
result of a Fundamental Change or Change in Control (as applicable)
in connection with the Merger, holders of the Notes should read the
related applicable Fundamental Change Notice or Change in Control
Notice, and any other related documentation when it is available
because it contains important information. Those documents
will be available for free from the Company if and when such offer
to repurchase the Notes is commenced.
Additional Information
This press release is for informational purposes only and is not
a recommendation, an offer to purchase nor a solicitation of an
offer to sell securities. The Tender Offer is being made pursuant
to a tender offer statement on Schedule TO filed by the Purchaser
with the SEC on August 7, 2017. The
Company filed a solicitation/recommendation statement on Schedule
14D-9 with respect to the Tender Offer with the SEC on August 7, 2017. The tender offer statement
(including an offer to purchase, a related letter of transmittal
and other tender offer documents) and the
solicitation/recommendation statement contain important information
that should be read carefully before making any decision to tender
securities in the planned Tender Offer. Those materials will be
made available to the Company's shareholders at no expense to them.
In addition, all of those materials (and all other documents
relating to the Tender Offer filed with the SEC) are available at
no charge on the SEC's website: www.sec.gov. In addition, the
Schedule TO and related exhibits, including the offer to purchase,
letter of transmittal, and other related documents may be obtained
for free by contacting Innisfree M&A Incorporated, the
information agent for the Tender Offer, toll-free at (877) 456-3524
(for shareholders) or collect at (212) 750-5833 (for banks and
brokers) or in writing at 501 Madison Avenue, 20th Floor,
New York, New York 10022, and the
Schedule 14D-9 may be obtained for free by contacting the Company
at 395 Hudson Street, New York, NY
10014.
About WebMD
WebMD Health Corp. (NASDAQ: WBMD) is the leading provider of
health information services, serving consumers, physicians,
healthcare professionals, employers, and health plans through our
public and private online portals, mobile platforms and
health-focused publications.
The WebMD Health Network includes WebMD.com, Medscape.com,
MedicineNet.com, eMedicineHealth.com, RxList.com, Medscape
Education (Medscape.org) and other WebMD owned sites and apps.
******************************
Any forward-looking statements, including, but not limited
to, statements regarding the proposed merger, the expected
timetable for completing the transaction, strategic and other
potential benefits of the transaction, and other statements about
WebMD managements' future expectations, beliefs, goals, plans or
prospects, are subject to risks and uncertainties such as those
described in WebMD's periodic reports on file with the Securities
and Exchange Commission. These statements speak only as of the date
of this press release and are based on WebMD's current plans and
expectations and involve risks and uncertainties that could cause
actual future events or results to be different from those
described in or implied by such forward-looking statements,
including risks and uncertainties regarding: changes in financial
markets; changes in economic, political or regulatory conditions or
other trends affecting the healthcare, Internet and information
technology industries; and changes in facts and circumstances and
other uncertainties concerning the proposed transaction. Further
information about these matters can be found in WebMD's Securities
and Exchange Commission filings. WebMD cautions investors not to
place considerable reliance on the forward-looking statements
contained in this press release. Except as required by applicable
law or regulation, WebMD does not undertake any obligation to
update or revise any of their forward-looking statements to reflect
future events or circumstances.
******************************
WebMD®, Medscape®, CME Circle®, Medpulse®, eMedicine®,
MedicineNet®, theheart.org® and RxList® are among the trademarks of
WebMD Health Corp. or its subsidiaries.
View original
content:http://www.prnewswire.com/news-releases/webmd-health-corp-provides-notice-of-anticipated-make-whole-fundamental-change--make-whole-change-of-control-to-holders-of-its-convertible-notes-300500281.html
SOURCE WebMD Health Corp.
