IDTC huge news report last night. Excerpts below.
Softbankt in talks on Net2Phone investment
Web investor's move could signal IPO for IDT unit
By Steve Gelsi, CBS MarketWatch
Last Update: 7:25 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 that 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 that 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 the brokers involved in the deal.
IPO speculation
Speculation that IDT would spin off Net2Phone in an initial public offering has helped boost the company's stock in recent weeks. The stock closed at 12 on Feb. 24.
David Readerman, a 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), whose market cap 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 that Net2Phone may be nearing a distribution deal with the Go Network, which is jointly operated by Infoseek (SEEK) and Walt Disney (DIS).
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