Come on you Yankies, get with the programme. DIAL is so undervalued it isn't true. Perhaps it needs to move its domicile to San Francisco in order to get the attention it deserves.
What's a little debt problem when you've got this sort of potential?
Date: 24 Aug 1999 10:09:03
Service: AFX
LONDON (AFX) - Dan Wagner, chief executive of Dialog Corp PLC, today set out
his stall for investors and buyers who may be interested in different parts of
the business and asked the investment community to look beyond the group's
ongoing search for refinancing.
In its second quarter results announcement today the group, formed by the
merger of MAID and Knight Ridder Information, gave examples of contemporaries in
the web-based information industry with valuations far in excess of Dialog's own
130 mln stg market capitalisation.
In an interview with AFX News Wagner admitted that the group's results this
morning look like an auction list but explained that "we believe strongly tha
this company is not being seen for what it is."
"We have an overhanging perception as a debt-ridden struggling business when
in reality this is a business that has some fantastic opportunities, high growth
areas and tremendous assets that have comparables in the market that are valued
at billions."
He said: "If we were to auction or sell off any piece to resolve our current
predicament then at least people would understand what we had auctioned off".
Certainly the possibility of selling off parts of the business in order to
fulfill the group's desire to restructure its debt is being considered by the
group's advisors Salomon Smith Barney and Chase Manhattan Bank, he said.
These advisors are looking to help the group release some the profits it is
generating into its existing business rather than into the hands of bankers.
The group currently owes 85 mln usd in bank debt with interest set at 2.5
pct above base rates. It is paying off 22 mln usd a year and has already paid
13.5 mln usd this year.
The group also has high yield bonds which have another eight years to run
and are not currently a cause for concern as the interest is covered and the
bondholders are not concerned -- unlike the group's shareholders.
Recent press reports have suggested that the group is looking to sell off
Sparza, which supplies the underlying technology behind the group's
OfficeShopper product, as part of this refinancing process. The business'
industry comparables include Nasdaq-quoted Ariba and CommerceOne.
Wagner admitted that "nothing is being ruled out" as the group's advisors
look to fulfill its banking obligations. "We are listening to everyone and
everything", he said.
Wagner said these advisors are talking to parties in the financial community
as well as trade partners who would be interested in taking equity stakes in
order to help refinance the group.
When the group announced a licencing deal with Fujitsu in June some in the
industry had hoped that it was a curtain-raiser to the Japanese firm taking a
role in the refinancing.
Wagner admitted that there might be merit in bringing the group on board
through an equity stake but added "we seem to be getting a lot of value out of
Fujitsu without them having to be equity partners".
"We would much rather have financial people come in," he said.
He refused to set a deadline for completion of the talks. In the past he
said a solution was imminent which lead to the banks involved in the talks
attempting to take advantage of the situation to Dialog's disadvantage.
In its figures the group said companies comparable to parts of its Web
Solutions Division include Easdaq-quoted Autonomy and Nasdaq-quoted Verity and
Excalibur. Wagner said the group's Muscat search technology business -- worth
about 5 mln stg in revenues -- is comparable to Autonomy, worth 300 mln usd.
Industry comparable companies to its new search engine WebTop.com -- to
launch later this year -- include Nasdaq-quoted About.com, VerticalNet (NASDAQ
and Ask Jeeves.
In the group's electronic commerce division lurks OfficeShopper, an
internet-based commercial office products marketer and distributor, which
launched in December 1998. It plans to launch in a U.S. site before the year-end
and U.S. vendors have already been signed.
The U.S. office supply market is currently worth 225 bln usd and is highly
fragmented with over 90 pct serviced by small local dealers. Wagner said
Nasdaq-quoted Chemdex is the closest publicly listed comparable to the business.
(More to follow)
rdw/mh
Regards
Basildon Bond
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