Transaction Network Services Inc. (TNS:US), which has rebuffed buyout offers from its former chief executive, will pay investors $4 a share and revise its 2007 earnings forecast for costs of borrowing to pay the dividend.
Loans totaling $240 million will be used to fund the one- time dividend (TNS:US), costing $98.4 million, to repay existing debt and to possibly acquire other companies, TNS said in a statement today. The company, based in Reston, Virginia, provides data services for credit and debit-card transactions.
The company doesn't pay a regular dividend on its shares, which have declined 25 percent in the past year. TNS has rejected buyout offers led by former CEO John McDonnell Jr. The most recent offer of $16 a share came in January. The stock fell 14 percent after the company rejected the offer.
``TNS's board felt it was important to recognize our shareholders' commitment during the stock price volatility caused by multiple initiatives to acquire the company last year,'' Henry Graham, chief executive officer, said in the statement today.
Shares (TNS:US) of TNS fell $1.20, or 7 percent, to $15.94 at 4 p.m. in New York Stock Exchange trading, the most in two months.
The company previously predicted a 2007 profit of $23.6 million to $26 million, or 97 cents to $1.07 a share, excluding some items. The new forecast will be issued when first-quarter results are reported in early May, the company said.
The special dividend is payable on April 12 to stockholders of record April 9. At the end of 2006, the company had cash and cash equivalents of $17.3 million, according to a regulatory filing. General Electric Capital Corp. is the lender for the $225 million seven-year loan and $15 million revolving credit line.
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