Softbank in talks to invest in Net2PhoneWeb investor move could signal IPO for IDT unit
By Steve Gelsi, CBS MarketWatch
Last Update: 6:53 PM ET Apr 8, 1999
Also see: NewsWatch
SAN JOSE, Calif. (CBS.MW) -- Internet king maker Softbank is
in negotiations with IDT to invest in Net2Phone, a further sign IDT
plans to spin off the unit, CBS MarketWatch.com has learned.
Gary E. Rieschel, executive managing director of Softbank
Technology Ventures' west coast office, said Thursday his
company is nearing a deal with Net2Phone, a unit of Hackensack,
N.J.-based IDT (IDTC).
"We are in the diligence process with
Net2Phone," Rieschel said. "There is not a
signed deal yet. But I am a real fan of what they
are doing and think they will be very
successful."
Softbank owns big stakes in some of the most
heavily-traded Internet companies including
Yahoo and E-Trade.
Rieschel declined to say how much Softbank
would invest. He said the deal may close within
the next two weeks. He declined to comment on
brokers involved in the deal.
Shares of IDT dipped 5/8 to 23 13/16 on Thursday. Company
officials did not return phone calls seeking comment.
IPO speculation
Speculation IDT would spin off Net2Phone in an initial public
offering has helped boost its shares in recent weeks. The stock
closed at 12 on Feb. 24.
IDT has yet to file for an IPO for Net2Phone, although a bond deal
late last month appeared to signal that a move is near. See related
story.
David Readerman, partner in San Francisco-based Thomas Weisel
& Co., said Softbank has a reputation for backing successful
Internet ventures.
"They've had a real hot hand," he said. "I don't know if their
investments are a cause and effect to ensure success, but they've
had a good track record."
Bullish on Web phones
Softbank, whose shares trade in Tokyo under the
symbol SFTBF, owns about 28 percent of Yahoo
(YHOO), which reported better-than expected
earnings this week. See related story. Softbank
also owns stakes in other rapidly rising firms
such as E-Trade (EGRP), which has doubled in
the past three months.
"Internet telephony is going to be huge,"
Rieschel said. "Net2Phone is one of the few
making a branded play for consumers."
He said Net2Phone is one of two Internet
telephony specialists that will be getting an
investment from Softbank, but he declined to
name the second player.
Nor would he comment on reports saying that
Net2Phone may be nearing a distribution deal
with the Infoseek (SEEK), Disney (DIS) GO
Network.
Net2Phone has service deals with Yahoo and GeoCities (GCTY),
two of the Internet companies in which Softbank holds stakes.
It's also been adding to its list of clients, signing recent deals with
InfoSpace (INSP), IBM (IBM) and Netscape (NSCP). Rieschel
declined to say if Netscape owner AOL (AOL) was in talks for a
Net2Phone deal.
Steve
Gelsi is a reporter for CBS MarketWatch. |
