Viacom and Medscape Sever Ties
The announcement, made last week, comes just as investment bank Lazard Freres is helping Medscape, Hillsboro, OR, evaluate the sale of one or both of Medscape's business units.
A leading presence in online medical information, Medscape.com has 4 million registered users. This includes 675,000 physicians and 1.9 million registered as allied health professionals.
Under the terms of the termination arrangement, Medscape will return to Viacom an estimated $111.3 million in outstanding balance of CBS advertising inventory that it holds. Medscape values that on its books for nearly $56.6 million.
In return, Viacom will pay Medscape $10 million in cash and transfer to Medscape all 4,695,892 shares of Medscape stock that it holds. These shares were issued by Medscape at the start of its CBS relationship and converted into Medscape shares when that company was merged with MedicaLogic Inc.
Viacom will also surrender its rights to sit on Medscape's board of directors. Andrew Heyward, president of CBS News, has already resigned from the Medscape board.
Medscape will stop using the CBS logo and trademark, and the "Healthwatch" trademark after a brief transition period. Medscape's consumer site will be renamed Medscape Health and located at www.medscapehealth.com.