The agreed upon purchase price of $32.08 per share is what the stock closed at on Friday. The total amount of the buyback will cost WebMD $177 million, and will be funded with cash and cash equivalents on hand at WebMD.
WebMD CEO David Schlanger said in a statement that, "Our decision to repurchase these shares reflects our belief that, as the health care landscape continues to evolve, the combination of WebMD's trusted brand, industry-leading scale, high-quality consumer and professional audiences and customer relationships provides us with a strong foundation to deliver long-term growth."
It was reported in the middle of September that Icahn sold almost $40 million of his WebMD stake. As of the most recent quarter, Icahn held almost 6.7 million shares which were valued at close to $200 million, according to SEC filings.
Icahn became the biggest shareholder in WebMD in November 2011, when he paid $103.4 million to get a 9.5% stake in the company. He later boosted his stake to 13%.
Since June of this year, WebMD has bought back 10.8 million of its common shares and also almost $150 million of its debt. In total, the company will have roughly 40.4 million shares outstanding following the transaction and $550 million in cash. In addition the company will still have $54 million authorized for share repurchases. The purchase announced today was made outside of the company's existing share repurchase program.
At the time of writing WebMD's stock is up almost 10% on the news of the repurchase.
-- Material from The Associated Press was used in this report.
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