Adding to November reports by TheStreet that WebMD(WBMD), the New York Post reports that private equity firms bidding for the online healthcare company have a Monday deadline.
The New York -based company is increasingly in deal crosshairs as reports of private equity bidding interest circle, just as legendary investors Carl Icahn and George Soros increase holdings in the lagging stock. KKR(KKR) and Providence Equity Partners are among four potential suitors for WebMD who have until Monday to firm bids, the Post reports, citing unnamed sources in a Thursday article.According to Post , potential private equity buyers will look to finance a purchase by raising debt equal to six times the company's earnings before interest taxes depreciation and amortization, half of the 12 times EBITDA valuation that a sale may warrant.The sale rumors follow November filings with the Securities and Exchange commission that activist Carl Icahn increased his WebMD stake to 9.5% from 7.9%, adding to top share stake in the company. After reports of sale talks first were revealed by TheStreet, Icahn publicly stated a preference for the company to consider a $1 billion stock buyback program in favor of a sale. He considers the company "undervalued from a long-term perspective."See Carl Icahn's portfolio.Thursday's added reports of a potential WebMD sale process boosted shares nearly 8% to $37.42 and above $3.49 price that shares closed at after first sale reports surfaced. Even with a rumor-fueled stock, WebMD shares have faltered in 2011, falling nearly 30% year-to-date.WebMD shares have gained nearly 50% since its 2005 IPO, however they fell to a post-crisis low of $25.56 in September.In its third quarter earnings in November, the company reported revenue of $135 million and net income of $11.2 million that beat Wall Street expectations by a healthy margin, but it also lowered its full-year revenue guidance because of a slowdown in marketing spending by pharmaceutical companies.At the time, the company forecast revenue of $555 million to $565 million, down from an August estimate of $580 million to $600 million. >To order reprints of this article, click here: Reprints
No comments:
Post a Comment