Premiere Technologies Rises as WebMD Stake Surges
Atlanta, May 20 (Bloomberg) -- Shares of Premiere Technologies Inc., a provider of voicemail, e-mail and fax services, rose 10 percent after its stake in WebMD Inc. jumped to about $384 million when the Internet company and Healtheon Corp. agreed to a $9.8 billion merger.
Premiere climbed 1 5/8 to 17 15/16 in trading of 26.5 million shares, making it the second most actively traded stock in U.S. markets. Healtheon rose 20 3/8 to 100 5/8.
Premiere owns at least 2.1 million shares of closely held WebMD, which it purchased for $4.2 million. Under terms of the Healtheon merger, each WebMD share will be exchanged for 1.815 Healtheon shares.
The merger creates the largest Internet company serving the health-care industry. The market for health-care e-commerce and the processing of health-care transactions over the Internet is ''a huge market without a lot of competition,'' said Stephen DeNelsky, an analyst with BT Alex Brown & Sons Inc.
Atlanta-based Premiere's stake could rise to as much as 5.26 million shares, or about $960 million, of the combined Healtheon- WebMD, said Randy Salisbury, Premiere's senior vice president of corporate marketing.
Premiere's WebMD stake grew to 2.9 million shares in February because it received additional shares as dividends, said Michael Turits, an analyst at Prudential Securities Inc. Some of the new shares are convertible preferred, Premiere officials said, and may not be exchanged at the same rate as its common shares under the Healtheon merger.
''They appear to have made a very profitable investment in WebMD,'' Turits said of Premiere. ''At the same time, I have a 'hold' rating on the stock, because they face a number of challenges in getting growth out of their core businesses.''
Premiere sells virtual personal-assistant services, which allow users to have one phone number follow them to multiple phones. Through its partnership with WebMD, Premiere provides doctors with its Orchestrate unified-messaging platform, which allows access to faxes, e-mail and voicemail from a computer or touch-tone phone, Salisbury said.
Shares of Premiere have more than doubled in value this year, much of which Turits attributes to the company's Internet investments. These include WebMD and USA.Net Inc., a provider of free e-mail boxes that filed for a $100 million initial public offering in early April. Salisbury said Premiere has a 14 percent sake in USA.Net.
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