A Medical Device Daily

WebMD Health Corp. (New York) said it has launched its tender offer to purchase up to 5.7 million shares of its common stock for $37 a share.

The price per share represents a change from $36 a share that WebMD reported last week (Medical Device Daily, Nov. 5, 2009). The number of shares proposed to be purchased in the tender offer represents roughly 10% of WebMD's currently outstanding shares, the company said. The last reported sales price per share of WebMD common stock on the Nasdaq Global Select Market on Monday was $35.75 a share.

The tender offer will expire at 5 p.m. EST on Dec. 10, unless extended by WebMD. Tenders of shares must be made on or prior to the expiration of the tender offer and may be withdrawn at any time on or prior to the expiration of the tender offer.

WebMD's stockholders will have the opportunity to tender some or all of their shares at a price of $37 a share. If stockholders properly tender and do not properly withdraw more than 5.7 million shares, WebMD will purchase shares tendered by those stockholders owning fewer than 100 shares, without pro ration, and all other shares tendered will be purchased on a pro rata basis, subject to certain conditional tender offer provisions. Stockholders whose shares are purchased in the tender offer will be paid $37 a share, net in cash, less any applicable withholding taxes and without interest, promptly after the expiration of the tender offer period.

Currently, WebMD has about $1 billion in cash and investments. WebMD said it would use a portion of its cash and cash equivalents to fund the tender offer.

The information agent for the tender offer is Innisfree M&A. The depositary is American Stock Transfer & Trust Company.

In other financing activity, HealthSport (Woodland Hills, California), a developer of edible, multi-layer film strips designed to deliver drug and dietary supplement actives through buccal and sublingual absorption as well as oral ingestion, reported that its manufacturing partner, SMI Manufacturing (Tempe, Arizona), has agreed to invest $10 million into HealthSport. The investment is expected to accelerate HealthSport's growth and strengthen its alliances with large pharmaceutical companies to provide the next generation drug delivery technology, the company said.

SMI will invest the $10 million into HealthSport in exchange for a 55% stake in HealthSport. Closing of the transaction is anticipated to occur in the next 15 to 20 days. At the time of the closing, SMI will deliver to HealthSport $2 million and a promissory note for $8 million that SMI will pay in five installments through the final scheduled payment on June 30. Funds from the investment will be used to strengthen HealthSport's working capital position, provide funds for R&D and enhance HealthSport's current manufacturing plant, the company said.