WebMD greenshoe lifts 2.5% convertible notes due 2018 to $400 million

By Melissa Kory

Cleveland, Jan. 11 - WebMD Health Corp. said its underwriter exercised in full the $50 million over-allotment option on its 2.5% convertible notes due Jan. 31, 2018, , lifting the closed offering to $400 million.

WebMD priced $350 million of the seven-year convertibles before the market open on Jan. 6 at 99, a discount to par, to yield 2.53% with an initial conversion premium of 27%.

The bookrunner for the deal was Citigroup Global Markets Inc.

The notes have no calls or puts. They have stock-only conversion settlement as well as dividend and takeover protection.

The notes are convertible into shares of WebMD common stock based on an initial conversion rate of 15.1220 shares per $1,000 principal amount of notes, or an initial conversion price of $66.13 per share.

The initial conversion price represents a premium of about 27% over the closing price of WebMD common stock on Jan. 5.

WebMD's stock closed at $53.02 on Jan. 10.

In connection with the offering, WebMD repurchased 1,920,490 shares of its common stock at a price of $52.07 per share and intends to use the remainder of the net proceeds from the sale of the notes for general corporate purposes, which may include acquisitions and additional repurchases of its common stock, and for working capital.

Elmwood Park, N.J.-based WebMD is a provider of health information services though online portals and health-focused publications.

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