Dialog To Sell Core Services To Ease Debt Burden

Online information group, Dialog, has revealed plans to sell off its core business in order to wipe away the debt which has been crippling the company since its creation in October 1997. Dialog was created by the £261 million takeover of Knight Ridder Information by MAID (see Maid Acquisition To Go Ahead) and has struggled to make the interest repayments on the debt resulting from the deal.

The company this morning said it is in advanced discussions with an unnamed third party to sell off its core Information Services Division, which accounts for around 90% of Dialog’s revenues. It is understood that this third party is Thomson Corporation, a Canadian Publishing company, although Dialog has refused to comment on this. The third party is to pay cash for the Information Services Division, which Dialog will use to write off debt, believed to be in the region of £165 million. The arrangement will also see a strategic alliance and equity subscription set up with the buyer.

Dialog’s remaining business, which concentrates on ecommerce and web solutions, will be renamed Bright Station. As part of Bright Station, an new Internet Ventures Division will also be established. These developments are to be funded by a further equity injection from another third party, Dialog confirmed. If all proceeds as planned Bright Station will trade its stock on the London Stock Exchange and NASDAQ, under the BSN and BSTN symbols respectively.

The problems restructuring Dialog’s debt have caused the company’s share price to fall to a low of 55p at one point last year. However, shares have soared on the back of the company’s plans, up 50p (27.6%) to 231˝p at close yesterday; stock has since fallen again this morning, down 38p at 193˝p by 10:30am.

Dialog: 020 7930 6900 … www.dialog.com … www.brightstation.com