After announcing just last week that their proposed merger might not happen due to a negotiations impasse, WebMD (NSDQ: WBMD) and its parent HLTH Corp. now say that their deal will go through. The plan calls for each HLTH share to convert into .1979 shares of WebMD and $6.89 in cash, representing a 26 percent premium for HLTH shareholders. Following the transaction, current HLTH shareholders will hold 80 percent of the combined company, and the dual-class structure for WebMD will be eliminated. The cash portion of the transaction will be funded out of the cash holdings of both companies, as well as receipts from the disposal of two of WebMD’s non-core businesses. The transaction is expected to close in either Q2 or Q3 of this year, pending mostly normal hurdles.

-- One atypical hurdle that may be worth keeping an eye on: HLTH needs to sell off $195 million in what are known as auction-rate securities; these are instruments that have in the past been considered equivalents to cash, but which are now facing liquidity issues in the face of the credit collapse. They’re sort of this week’s “sub-prime” (more here in the WSJ). HLTH says its holdings are guaranteed under the Federal Family Education Loan Program, so perhaps this will be nothing, but it’s obviously a matter of some concern. Release.

Separately, WebMD said its Q4 revenue grew 22 percent to $96.6 million, from $79.4 million. Net income soared to $48.3 million, from $6 million, although this quarter benefited from certain tax-related gains of $24.7 million. In the quarter, advertising and sponsorship revenue grew 21 percent to $70.4 million, while the portal licensing business increased 25 percent to $21.6 million. Excluding the lost AOL (NYSE: TWX) traffic, the company’s network claims a 22 percent year-over-year increase in unique users.

Release | Webcast (4:45 PM ET)

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