the problem is doing it on a contingency basis. it has been discussed with attorneys. the initial class actions were predicated on ntop's independent committee NOT approving the first offer, which i am sure they were advised not to do. those were fee contingency cases, and idt quickly got them to settle. one attorney in the ntop private forum even spoke several times with one of the class action firms filing the initial action (which settled) and they would have considered the case, but wanted a copy of the $2.83 valuation idt had done of ntop in december 2004. of course, no exterior shareholder has it. other firms, so far, look at costs of the case vs. contingency. ntop has, for example, paid $2.3 million for the offer, including attorneys and valuations; and idt maybe a similar amount. [if that money had been directed into a second offer, which the independent committee gave approval to, ntop shareholders would have received more .. and idt would have just as certainly assured itself of shareholder approval AND independent committee approval initially; of course, it went to their attorneys, which defend them acts acts of 'fiduciary malfeasance'. there is no delaware judicial requirement that an independent committee or board of director decision actually be rational -- it can be written off to 'protect the parties' and 'business decision' the valuation was not 'fair.' there is even more certainly no delaware judicial requirement that an offer price for a company be fair. that is what fiduciary responsibility is all about. it matched the share price at the time it came out; and the independent voip providers ntop was compared to traded significantly higher. one has $25 million, the other $15 million; ntop has $99 millon, and jonas is paying $94.5 million roughly. that is less than ntop's cash -- and two-thirds money from the russian corbina telecom sale. of course idt paid for those in and out of the money ntop employee options at $2.05 in order to get shares tendered, and now is paying for idt options at $2.00 -- restless idt employees]
the independent committee mentioned the idt valuation of ntop in december 2004 of $2.83 before the march 2005 progression of rollouts, but didn't insist that it start there. the independent committee mentioned that ntop had received $18.8 million from altice a week after the idt $2.05 offer, but didn't insist that idt include it, when idt said no. the independent committee mentioned distributing that as a dividend, but didn't insist when idt said no. the independent committee had asked for another .20 cents for approval above the $2.05 offer, but didn't say no back to idt, when idt said no to it. the independent committee had no opinion on the $2.05 offer, but later recommended it when idt had shares, many tendered thru market makers, who had no stake in the company, giving the ntop to jonas after he votes the shares he controls.
ntop's share price dropped 50% after the secondary .. it was over $8. the secondary was set at $4.50. the money was intended for tier 1 cable mso rollouts. ntop had no tier 1 signed up, and didn't get one.
the share price was cut another 50% when liberty media took idt shares in lieu of its ntop shares, and funds exited, before the march 2005 rollouts. that took ntop out of the russell 2000, with selling. aol rolled outs its own voip solution, and within weeks sold 1.5 million ntop shares it had kept since the crash on the market, and sold them poorly, for almost anything. idt then made its offer in late june 2005, at the low. a delaware court would look at that as a specific. it's part of the judicial valuation consideration issues -- did a purchaser move in a scenario when the share price was artificially low -- in this case idt generated the resuling share price in ntop, provding the bargain. idt insisted it would NOT sell its own shares of ntop to anyone.
idt, per the conference call, is considering its own voip solution/offering now. and howard jonas will be put personally in charge of voip for idt. (the out idt must have re legacy telecom is thru voip and/or wireless -- or it will sit quarter after quarter, with the same difficulties, as the market moves to new tech.) |
