(UPDATE) IDT Sets Terms For Net2Phone IPO Amid Takeover Rumors
Dow Jones Online News, Monday, June 28, 1999 at 15:25
NEW YORK -(Dow Jones)- Shares of IDT Corp., a telecommunications
company that offers Internet-based telephone services, rose Monday after
it released details for an initial public offering for its Net2Phone
Inc. unit and rumors surfaced to suggest that Sprint Corp. may bid for
IDT.
Shares of IDT (IDTC) were up $2.625, or 13%, ato $23.25 in afternoon
trading.
The takeover talk was mentioned on JagNotes, an Internet site
recently credited with moving other stocks such as Earthlink Network
Inc., an Internet-access provider.
IDT Vice President of Finance David Brainson noted that Net2Phone
executives began promoting their initial public offering to investors
Monday but declined to comment on the Sprint rumors. According to
Brainson, IDT's post-offering stake in Net2Phone will be about 58%, or
about 27.2 million shares.
IDT said it expects to offer 4.8 million common shares of Net2Phone
priced at $10 to $12 each. Last month, IDT filed to hold an IPO for the
unit but didn't detail terms. Net2Phone provides telephone service over
the Internet rather than traditional phone netowrks. Some $7 million of
the proceeds from the offering will be used to pay of IDT debt. The
company will also pay $1.5 million to General Electric Corp.'s NBC unit
for the purchase of television advertising.
Gregory P. Miller, an analyst who follows IDT Corp. at Jefferies &
Co., called the Sprint rumor "misguided," saying "There is absolutely
nothing (IDT) offers that Sprint would want."
Hackensack, N.J.-based IDT provides prepaid calling cards, Internet
access and, through its 66%-owned Net2Phone unit, Internet telephony
services.
"Although Internet telephony is a growing area," said Sprint
spokesman Bill White, "Sprint remains focused on developing its ION
services." Sprint ION, which stands for Sprint Integrated Online
Network, is a broadband technology that merges local- and long-distance
voice services, multiple phone lines, Internet access and other features
over a single connection. The Kansas City-based telecom is in the
process of rolling out the system to selected U.S. cities.
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