News Corp. Plans to Invest in Net Firm

Rupert Murdoch’s News Corp. is close to investing $1 billion in newly merged Healtheon/WebMd Corp., a move that would enable the Internet-based health and information company to distribute and promote its services through cable television, sources said Monday.

The transaction is expected to be announced in about two weeks, when the merger is expected to be completed, though final details are still being worked out, sources said. Murdoch, News Corp.’s chairman and chief executive, has been directly involved in the talks, which have been conducted during the last six weeks in London, New York and Los Angeles.

News Corp. intends to invest $150 million in cash for a 10% stake in Healtheon WebMd, valuing its shares at about $50, or about 50% more than Friday’s closing price, sources said.

Santa Clara-based Healtheon gained $9.06 to close at $42 before trading was halted with five minutes remaining. About half the gain came in the last 15 minutes of the session after the plan was reported.

News Corp. also will invest $150 million in Healtheon WebMd International, a new, affiliated company, in return for a stake of about 50%, sources said. News Corp. will make the remaining $700 million of investment by contributing a health cable network and promotion on its Fox network and other media outlets.

In addition, Softbank Corp., a Tokyo-based investor in Internet companies, will invest $100 million in the international affiliate, sources said.

A spokesman for Softbank said the company had no comment.

The merger of Healtheon and Atlanta-based WebMd will form the largest online company linking doctors with insurers, suppliers and patients. The $10.3-billion transaction is slated to close on Thursday, sources said.

Officials at News Corp., Healtheon and WebMd weren’t immediately available for comment.