IDT Corp. is making a bid to buy up the remaining stock of voice-over-IP provider Net2Phone Inc. for a hefty $1.70 per share in cash.
IDT, which already directly or indirectly owns through its affiliates approximately 41 percent of Net2Phone's outstanding equity securities and commands a 57 percent voting position, made the tender offer after market close yesterday. The cash stock offer - sans interest - is a premium compared to Net2Phone's $1.41 per share closing price as of yesterday.
The offer will be subject to a waivable condition that as a result of the offer, IDT acquires at least 90 percent of the outstanding Net2Phone shares. If successful, IDT would then merge Net2Phone with one of its subsidiaries, delist the VoIP service provider from the Nasdaq boards and essentially take it private.
Through its IDT Telecom subsidiary, IDT operates a multinational fiber optic backbone and offers retail and wholesale long-distance and international calling services. Other subsidiaries also provide content distribution and radio broadcasting.
Net2Phone, meanwhile, has been trying to carve out a niche for itself in the broadband telephony space, offering operators a turnkey VoIP service including network operations and management. It has gained deals so far with a handful of small and mid-sized MSOs, including Millennium Digital Media, Cequel III and Bresnan Communications.