After plunging more than 54% this year, the sharks may start circling WebMD (WBMD). Prominent hedge fund managers Carl Icahn and George Soros have each already bought a seat at the table so to speak, and with WBMD’s record cash and low valuation private equity bidders may soon come to the party reports Bloomberg.
Carl Icahn filed on October 21 that his fund had bought 4.55 million shares of WBMD, roughly 7.9 percent of the company. But, he wasn’t done. Last week, he increased his position even further, bringing his stake to 9.5 percent. Icahn called the stock “undervalued from a long-term perspective” and “said he may seek conversations with management.” Three days later, George Soros’s Soros Fund Management announced “it owned shares and convertible bonds with the right to buy shares totaling 5.6 percent of WebMD’s equity.” Soros reportedly “doesn’t intend on ‘changing or influencing control of’ the company.”
WebMD Adopts a Poison Pill, Capping Investors at 12%
WebMD may have started to get a little nervous. It “adopted a so-called poison pill, designed to prevent ‘inadequate or coercive’ takeover attempts,” capping investors from owning any more than 12 percent of the company. In response, “Kensico Capital Management Corp., a Greenwich, Connecticut-based hedge fund, yesterday reported an increase in its passive stake to 11.6 percent, topping Icahn to become WebMD’s largest shareholder.”