Dice Inc. the provider of online recruiting services for technology professionals, recently announced that it has negotiated the right to repurchase, upon the occurrence of certain events, $53.02 million face amount (or 74% of the total) of its 7% convertible subordinated notes due January 2005 (the ''Notes'') at up to a 30% discount from three of its largest noteholders.
Option to Repurchase Convertible Notes:
Through agreements with these holders, the company has the right upon certain change of control events to repurchase the Notes from such holders at prices ranging from 70% to 110% of face value, plus accrued interest through the date of repurchase. The actual repurchase price will depend upon the amount received by the company or its stockholders as a result of the change of control event. Repurchase prices higher than the minimum (70% of face value) are triggered by a change of control at a price that would be a premium to the current market value of the company, increasing to the maximum of 110% of face value as proceeds to stockholders increase. The companyís repurchase option expires on October 3, 2002, although it may be extended for an additional three months under certain conditions.
Under the terms of the indenture pursuant to which the Notes were issued, upon the occurrence of a change of control event the holders would have been entitled to require the company to repurchase the Notes at a price equal to 100% of the aggregate principal amount, plus accrued interest to the repurchase date.
In consideration for entering into these agreements, the company is paying the equivalent of one coupon payment, or $1,856,000 in the aggregate, to the three holders. In addition, the company is repurchasing $1,766,000 aggregate principal amount of Notes from one of the holders for $1,236,000 in cash, plus accrued interest of $24,000. This holder will be entitled to receive an incremental payment on the $1,766,000 of Notes on the terms described above if a change of control event occurs.
Comments from Management:
By negotiating attractive repurchase terms for 74% of our outstanding debt, we are now in a position to move forward with evaluating various strategic alternatives, said Scot Melland, president and CEO of Dice Inc. What this means for stockholders is that at our current market value, if a change of control occurs, stockholders of our company will have realized a net additional $14 million of equity value.
Exploration of Strategic Alternatives:
The company also announced that it has retained UBS Warburg as its financial advisor in connection with an exploration of strategic alternatives. The companyís Board of Directors has authorized management and its financial advisor to explore strategic alternatives that would maximize shareholder value, including debt restructuring or refinancing, mergers, sales, strategic alliances or other similar strategic alternatives.
www.dice.com
Dice Inc. negotiates right to repurchase convertible notes at up to 30% discount
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