UPDATE 2-HLTH to merge into WebMD unit in all-stock deal

* Deal values HLTH shares at $12.54 apiece

* WebMD to be the surviving company after merger

* Merger to eliminate WebMD's dual-class equity structure

* Deal expected to close in Q3 or Q4

* HLTH shares hit a new 52-week high (Adds details, analyst's comment, share movement)

By Shailesh Kuber

BANGALORE, June 18 (Reuters) - Health information services provider HLTH Corp HLTH.O will merge into its subsidiary WebMD Health Corp (WBMD.O) in an all-stock deal to remove the inefficiencies of having two separate public companies.

HLTH shares jumped 9 percent on Nasdaq to touch a new 52-week high of $12.79. WebMD Class A shares rose as much as 4 percent.

The deal will eliminate both HLTH's controlling interest in WebMD, which will be the surviving company, and WebMD's existing dual-class stock structure, the companies said in a statement.

WebMD Class B shares will be retired and each outstanding HLTH common stock will convert into 0.4444 shares of WebMD Class A common stock, the companies said.

The deal values HLTH shares at $12.54 apiece, based on WebMD Class A shares' Wednesday close of $28.21. It represents a 7 percent premium on HLTH's Wednesday close of $11.76.

WebMD Chief Executive Wayne Gattinella will be the CEO of the combined company, while Martin Wygod, who is currently the acting CEO of HLTH, will remain as chairman. The merger is expected to close in the third or fourth quarter.

HLTH currently owns 48.1 million shares of WebMD Class B common stock, representing about 80 percent of equity of WebMD, which operates the popular healthcare website of the same name.

HLTH has 102.8 million common shares outstanding.

WebMD and HLTH have in excess of $800 million in cash and investments and no long-term debt other than HLTH's convertible notes. As part of the merger, WebMD will assume the obligations of HLTH's convertible notes.

In October last year, HLTH terminated a deal to merge into WebMD, citing the debt load that the new company would be saddled with in a deteriorating credit market. [ID:nBNG352389]