Could Ideon Group Inc. soon go on the block?
That's the spin some are putting on the embattled company's announcement Monday that it will pursue "strategic alternatives" aimed at enhancing shareholder value.
Adding fuel to the fire was Ideon's choice of Lazard, Freres & Co. and Skadden, Arps, Slate, Meagher & Flom as financial and legal advisers for that purpose.
Ideon also established a committee charged with overseeing "strategic direction." Eugene Miller, a nonmanagement director, is its chairman, and Ideon chairman Paul G. Kahn will exercise oversight of the panel.
"From the cast of characters they've brought in, one of Ideon's considerations would be a sale or a strategic alliance," said David Katz, chief investment officer of Mattrix Asset Advisors in New York and an Ideon shareholder since May.
Mr. Katz described either prospect as "wonderful" and said either would give Mr. Kahn "a way that he walk away and say he salvaged profitability for the shareholders."
Mr. Kahn remains under "significant shareholder pressure" due to Ideon's fallen stock price, according to Mr. Katz. Ideon's stock was valued at $20.65 a share Feb. 28 but had slipped to $8.625 by May 26. Ideon closed at $9.75 Tuesday.
Ideon is tight-lipped about what its latest move means. "We can't go really much beyond what was said in the release at the present time," said Bill Lackey, an Ideon spokesman.
In a statement, Mr. Kahn said, "There can be no assurance that any restructuring or transaction will result from this process."
One industry observer speculated that Ideon's move was aimed at quelling a "shareholder revolt" led by Peter Halmos, ousted founder of Ideon subsidiary SafeCard Services Inc., whose much-publicized lawsuits remain a major distraction.
Mr. Halmos, in his latest press release condemning Ideon and Mr. Kahn, did not address that possibility.
The past year was brutal for Ideon and especially Mr. Kahn, whose ambitious expansion strategy backfired. Ideon jettisoned its Family Protection Network, a registry for missing children, and a servicing agreement with the PGA Tour Partners MasterCard. About 30% of Ideon employees lost their jobs - including president and chief operating officer John R. Birk.
Much of the ensuing furor was directed at Mr. Kahn, the past president of AT&T Universal Card Services, who had joined Ideon in 1993 with a mandate to diversify its marketing expertise and relationships.
Mr. Kahn was forced to reverse himself and concentrate on strengthening Ideon's core businesses - SafeCard, a card-registration company; Wright Express, which sells enhanced payment and information services to commercial vehicle fleets; and National Leisure Group, a provider of vacation and travel packages.
Toward this end, SafeCard signed a letter of intent in December to acquire United Bank Services, a Norman, Okla.-based company that offers products and services such as insurance, travel-related services, member services, merchant, and reward-loyalty marketing programs through financial institutions.
Terms are expected to include $18 million at closing and up to $12 million over the next three years.
Anita Boomstein, a lawyer at Hughes, Hubbard & Reed in New York who worked on the AT&T Universal card's launching, expressed doubt that Ideon would be sold. Mr. Kahn seems to have "refocused" the company, she said.
"He's consolidated his position and improved his position," said Ms. Boomstein. "I don't know if that means they're ripe for a takeover."
