Dial Narrows Strategic Options

Consumer products maker Dial Corp. has cut in half the strategic options it is considering and is now likely to chose to go it alone or be bought out, according to the company’s chief financial officer.

“Running as an independent or selling as a whole are the two most likely options,” said Conrad Conrad, chief financial officer during an investor meeting hosted by Banc of America Securities.

The maker of Dial soap, Renuzit air freshener and other products has been conducting a review for several months under new management, in the wake of a year when their earnings fell by about half. Other options Dial had been considering were selling parts of the company or a merger of equals. But selling parts, like its Armour canned meats unit, would cause a big tax hit for the company and increase overhead for the remaining businesses, he said.

At the same time, a merger of equals, even with two other companies, would not give Dial enough heft to compete with industry giants like Procter & Gamble Co. and Unilever Plc, Mr. Conrad said.

Some investors have questioned whether Scottsdale, Ariz.-based Dial, with about $1.5 billion in sales, can go it alone against companies that are more than 20 times as large.

“We have competed for a number of years against these (companies) and we have done well” except for a bad 2000,” Conrad told Reuters following the session. To go it alone, Dial will have to present its brands as value buys, William Steele, consumer products analyst at Banc of America, said. “If they can deliver a value product to the consumer… a quality product at a low price point, then there’s a market for them.”