A clutch of companies are said to be eyeing the debt-laden Anglo-American online information provider Dialog Corp. Some want to buy e-commerce and web software activities. Other are considering equity stake or possibly an offer for the whole company. But while directors and the principal lenders are confident of a solution, shares in the Cary, North Carolina and London, UK-based company slumped 16% to $5.5 yesterday.
In its third quarter to September 30, net income was $9.9m, up from $1.3m on revenue up 18.4% at $82.7m; for the first nine months, net income increased 1.4% to $11.5m on revenue up 4.4% at $226.5m. Net earnings per ADS were $0.26 for the quarter, up from $0.036, and were up 36% to $0.306 for the nine months.
Chairman Allan Thomas says that, while prospects for the business are encouraging, it is constrained by its current debt structure from pursuing high-growth opportunities in web software and e-commerce. The shortage of funds also prevents Dialog from aggressively marketing products from the information services division.
In order to get Dialog’s principal lenders to relax covenants relating to the loans, they have been given options to buy 6 million shares at current prices over the next ten years.
