Re: IDT - CTM Media Holdings ... (newest relevant SEC filing)
new,
google.brand.edgar-online.com
original announcement,
sec.gov
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from top filing (url),
[ __, 2009]
Dear IDT Corporation Stockholder:
We are pleased to inform you that the Board of Directors of IDT Corporation (“IDT”) has approved the spin-off of CTM Media Holdings, Inc. (“Holdings”), a wholly-owned subsidiary of IDT, to IDT’s stockholders. Following the spin-off, IDT’s business will consist of IDT Telecom, IDT Energy and IDT’s alternative energy initiatives, as well as other interests. Holdings will consist of the CTM Media Group, IDT’s majority interest in Idea and Design Works and the WMET-AM radio station.
The spin-off of Holdings will occur by way of a pro rata distribution of Holdings Class A common stock and Class B common stock to IDT’s stockholders. In the distribution, each IDT stockholder will receive one share of Holdings Class A common stock for every three shares of IDT common stock, one share of Holdings Class A common stock for every three shares of IDT Class B common stock, and one share of Holdings Class B common stock for every three shares of IDT Class A common stock, held at 5:00 p.m., New York City time, on [___ __,] 2009, which is the record date of the spin-off. The distribution of unrestricted shares of Class A common stock will be paid in book-entry form and physical stock certificates will be issued only to holders of Class B common stock, holders of restricted Class A common stock and upon request. Stockholder approval of the spin-off is not being sought, and you are not required to take any action to receive your Holdings common stock.
We believe that the spin-off will separate certain of our business units whose performance and financial results are more predictable and have different growth characteristics than the remaining operations. Management believes that separating the two groups of operating units will allow management of each of IDT and Holdings to design and implement corporate strategies and policies that are based primarily on the business characteristics of that company and its business units, maintain a sharper focus on core business and growth opportunities, and concentrate their financial resources wholly on their own operations. Moreover, the separation of Holdings will provide investors with greater transparency regarding the value of Holdings’ business units. In addition, the spin-off will separate business units with different risk profiles and performance characteristics from one another. Accordingly, we believe the spin-off will build long-term stockholder value.
Following the spin-off, you will own shares in both IDT and Holdings. We intend to apply to have the Holdings Class A common stock traded on [_______]. IDT common stock and IDT Class B common stock will continue to trade on the New York Stock Exchange under the symbol “IDT.C” and “IDT”, respectively.
We intend for the spin-off to be tax-free for stockholders. To that end, we expect to receive a favorable opinion from Stern & Kilcullen, LLC confirming the spin-off’s tax-free status. You should, of course, consult your own tax advisor as to the particular consequences of the spin-off to you.
The enclosed information statement, which is being mailed to all IDT stockholders, describes the spin-off in detail and contains important information about Holdings, including its financial statements.
We look forward to your continued support as a stockholder of IDT. We remain committed to working on your behalf to build long-term stockholder value.
Sincerely,
Howard S. Jonas
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[HOLDINGS LOGO]
[____ __,] 2009
Dear CTM Media Holdings Stockholder:
It is my pleasure to welcome you as a stockholder of our newly independent company, CTM Media Holdings, Inc. All of us at CTM Media Holdings look forward to becoming an independent company. Our management team and our employees have worked hard over the years to make the businesses that comprise CTM Media Holdings what they are today.
As an independent public company, we will have the ability to focus exclusively on the growth and development of our businesses and to create value for our new stockholders, as well as to concentrate our financial resources solely on our own operations. We also hope to achieve greater visibility – in the financial community, and for our products and services as well.
Following the spin-off, we will have holdings in media and travel-related businesses. We will focus on developing our brochure distribution and comic book and graphic novel publishing businesses, which have strong presences in their respective industries and niches, as well as our radio station. We believe our experienced management team and consistent performance are representative of the strengths that will position us to excel as a stand-alone entity and to continue our growth in the several markets in which we are engaged.
We intend to apply to have the Holdings Class A common stock traded on [________]. We invite you to learn more about us by reviewing the enclosed information statement. We look forward to our future as a separate publicly-traded company and to your support as a stockholder of Holdings common stock.
I am excited about the opportunities that the spin-off will create for our company, our customers and for you, our stockholders.
Sincerely,
Marc E. Knoller
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Background re Marc Koller:
Marc E. Knoller has been an Executive Vice President of IDT since December 1998 and served as a director of IDT from March 1996 to August 2007. Mr. Knoller joined IDT as a Vice President in March 1991 and also served as a director of its predecessor. Mr. Knoller has served as Vice President of Jonas Media Group (f/k/a Jonas Publishing) since 1991. Mr. Knoller has been our Chief Executive Officer since our inception. Mr. Knoller received a B.B.A. from Baruch College.
Board of Directors
Currently, our Board of Directors is composed of Howard Jonas and Marc Knoller. Prior to the spin-off, we intend to designate, and IDT intends, acting as our sole stockholder, to elect, additional directors such that a majority of our directors will be independent in accordance with our to-be-adopted Corporate Governance Guidelines, the rules of [______] and other applicable laws. Each director will hold office, in accordance with our Certificate of Incorporation and By-laws until the next annual meeting of stockholders and until his or her successor is duly elected and qualified.
Director Independence
Following the spin-off, our Corporate Governance Guidelines will provide that a majority of our directors must be independent under criteria established by [______]. Prior to the spin-off, we expect to designate directors in addition to Messrs. Jonas and Knoller such that a majority of our directors will be independent in accordance with our Corporate Governance Guidelines and the rules of [______] and other applicable laws.
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THE SPIN-OFF
After a thorough strategic review of IDT’s portfolio, IDT determined that separating the CTM, IDW and WMET businesses from its other operations would allow us to be in a better position to thrive under our own management focus and long-term growth plans and allow us to create more long-term value individually than through the combined entity. In addition, by separating from the remaining IDT businesses, we would avoid the risks associated with those businesses.
Other Benefits of the Spin-Off
Reduce internal competition for capital. Instead of having limited access to resources, we will now be able to invest any excess cash flow exclusively into the growth initiatives of our businesses. In addition, we will have direct access to the public capital markets to allow us to seek to finance our operations and growth without having to compete with IDT’s other businesses with respect to financing. As an independent entity, we will be in a position to pursue strategies our Board of Directors and management believe will create long-term stockholder value, including organic and acquisition growth opportunities, provided we continue to have access to capital.
Increase transparency and clarity into the different businesses of IDT and us. The investment community, including the respective analysts, stockholders and investors of IDT and us, will be better able to evaluate the merits and future prospects of each company. This will enhance the likelihood that each company will receive an appropriate market valuation.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
We are currently a subsidiary of IDT. Following the spin-off, our principal businesses, which are currently part of IDT, will consist of:
· CTM Media Group, our brochure distribution company, other advertising-based new product initiatives focused on small to medium sized businesses;
· Our majority interest in Idea and Design Works, LLC, which is a comic book and graphic novel publisher that creates and licenses original intellectual property; and
· WMET-AM radio station in the Washington, D.C. metropolitan area.
The spin-off will separate our businesses from IDT Telecom, IDT Energy and IDT’s alternative energy initiatives, as well as other IDT interests. We, along with IDT’s management, believe that the operational and growth prospects of our businesses may best be realized by a separation from those non-spun-off businesses based on several factors including synergies and growth prospects. Each of our businesses is described in more detail below.
CTM
CTM is a distributor of travel and entertainment information to visitors who desire to maximize their experience in a particular region. CTM has five divisions: Brochure Distribution, Design & Print, Publishing, RightCard TM , and Digital Distribution. Through these divisions, CTM offers clients a comprehensive media marketing approach. In fiscal 2008, CTM serviced over 3,000 clients and maintained more than 11,000 display stations, in over 30 states and provinces. CTM’s display stations are located in travel and entertainment venues, including hotels, resorts, interstate highway rest areas, airports and local attractions. Through its local sales force, CTM sells brochure slots in these stands to local advertisers, maintains the stands and ensures placement and replenishment of brochures. Advertisers include entertainment venues, tourist attractions, and cultural sites as well as their related service providers including dining, lodging, and transport services. CTM generated revenues which represented 63.6% of consolidated revenues in the six months ended January 31, 2009, 66.2% in fiscal 2008 and 88.4% in fiscal 2007.
IDW
IDW is a comic book and graphic novel publisher that creates and licenses original intellectual property. IDW generated revenues which represented 32.7% of consolidated revenues in the six months ended January 31, 2009, 30.2% in fiscal 2008 and 5.9% in fiscal 2007.
WMET
WMET 1160 AM is a radio station serving the Washington, D.C. metropolitan area. WMET generated revenues which represented 3.7% of consolidated revenues in the six months ended January 31, 2009, 3.6% in fiscal 2008 and 5.7% in fiscal 2007.
idt share price (? -- reflects fiduciary issues)
Q: Will the spin-off affect the market price of my IDT shares?
A: Probably. As a result of the spin-off, the trading price of IDT shares immediately following the distribution may be lower than immediately prior to the distribution because the trading price will no longer reflect the value of our businesses. In addition, until the market has fully analyzed the operations of IDT without these business segments, the price of IDT shares may fluctuate significantly. Furthermore, the combined trading prices of IDT’s common stock and Class B common stock and our common stock after the distribution may be higher or lower than the trading price of IDT common stock or Class B common stock prior to the distribution. See the Risk Factor entitled “There may not be an active trading market for shares of our common stock and stockholders may find it difficult to transfer our securities."
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