WebMD, News Corp. Restructure Deal
As part of its continuing restructuring plan, WebMD Corp. will revise its "complex strategic alliance" with the media company News Corp., resulting in a $275 million noncash charge in the fourth quarter, the Wall Street Journal reports. Hoping to become profitable after numerous mergers, WebMD has been reworking "several major alliances." WebMD and News Corp. will continue to collaborate -- although in a "less sweeping way" than planned in the original deal signed in 1999. Under the new plan:
- WebMD will take full ownership of an international venture between the two companies;
- WebMD will continue to provide health care content to News Corp.'s media outlets;
- WebMD will take back News Corp.'s preferred stocks, which would have been convertible into 21.3 million common WebMD shares. News Corp will be given a warrant to purchase three million WebMD shares at $15 each, and News Corp. will retain two million shares it bought at $50 per share one year ago;
- News Corp. will resume ownership over WebMD's 50% share in the Health Network, a cable television property intended to become WebMD TV;
- News Corp. will provide WebMD $205 million in domestic advertising and branding services over the next decade; the original pact had News Corp. providing $700 million of such services (Carrns, Wall Street Journal, 1/2).
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