Analyst: WebMD Buyout Not Aligned With IAC Strategy

WebMD Health Corp. (NASDAQ: WBMD) shares spiked as much as 3.4 percent Monday on a Dealreporter article alleging IAC/InterActiveCorp (NASDAQ: IAC)’s interest in a buyout. The report suggested bids above $61 per share.

However, Benchmark analyst Dan Kurnos doubts the story’s veracity. Kurnos, who met with IAC management at last week’s One-on-One Investor Conference, said WebMD doesn't  necessarily align with IAC’s current merger-and-acquisition strategy.

“IAC likes category killers,” Kurnos told Benzinga. “I don’t know if WebMD fits that bill. Besides, how would investors react if IAC did a deal for a content publisher when they’ve done their best to get away from the search space?”

Category killers, who dominate their industry’s vertical, include previous IAC targets such as Angie’s List Inc (NASDAQ: ANGI). The IAC-Angie’s deal is expected to close in the fourth quarter.

An IAC spokesperson said the company doesn't comment on rumors or speculation.

WebMD investors ought to be accustomed to acquisition chatter as a series of sale updates have recently cluttered market news feeds. Past speculation in the name surrounded the likes of Walgreens Boots Alliance Inc (NASDAQ: WBA) and UnitedHealth Group Inc (NYSE: UNH).

At time of publication, WebMD was trading up 1.5 percent, while IAC was down 1.4 percent.

Nick Donato contributed reporting.

Related Links:

Everything You Need To Know About The IAC Merger With Angie's List

Why Are Angie’s Shares Trading Sharply Above The $8.50/Share Bid Price From IAC?