NEW YORK (Thomson Financial) - HLTH Corp. Thursday said a purported notice
of default sent to the company by a law firm was without merit and defective.
The company said the law firm, which claimed to represent holders of HLTH's
3 1/8% convertible notes due 2025, argued that the default occurred because of
HLTH's intention to not issue a change-of-control notice to the holders in
relation to the company's proposed merger with WebMD Health Corp.
The firm also cited HLTH's intention to not adjust the conversion rate of
the notes following the merger.
HLTH said the merger didn't constitute a change of control and that the deal
wouldn't trigger a conversion-rate adjustment.
Under the terms of the agreement, WebMD will assume the obligation of HLTH
under the indenture when the merger becomes effective.
Shares of HLTH closed Wednesday at $12.30 while WebMD shares closed at
$34.41.
Ryan Vlastelica
rv/pc
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