IDT bond offering wins success Deal makes possible IPO of
Net2Phone unit
By Steve Gelsi, CBS MarketWatch
Last Update: 4:51 PM ET Apr 16, 1999
Also see: NewsWatch
HACKENSACK, N.J. (CBS.MW) -- IDT Corp. has
gathered the 50 percent stake in outstanding bonds necessary
to allow it pursue alternative financing for its Net2Phone
unit, including a possible IPO, people familiar with the
situation said Friday.
IDT (IDTC: news, msgs) launched the
$100 million tender offer on March 29.
The offering lasts through April 23.
A spokesperson from IDT declined to
comment.
Shares of IDT gained 2 1/16 or 7.5 pecent
to 29 1/2 on Friday.
Without the tender offer, only about 35
percent of the bonds could be redeemed
early by the company. Restrictions on the
bonds prevent the company from pursuing other options for
Net2Phone, such as an initial public offering.
Net2Phone provides Internet telephone service through
distribution deals with Yahoo and AOL Corp.'s Netscape
unit.
Riyad Said, an analyst with Friedman,
Billings, Ramsey, said the bond deal
seems to offer a healthy return for bond
holders. It was expected to fare better
than an earlier offer made in February.
"My sense is that they would get to a
majority position in the bonds with this
offer," he said. "If they got it, it's a major
step for them. It's been a big stumbling
block for them."
The tender offer applies to IDT's 8.75
percent senior notes issued Feb. 18, 1998
and due 2006. IDT offered to pay $1,020
in cash per $1,000 principal, plus accrued
interest.
Banker's Trust, CIBC Oppenheimer Corp.
and Lehman Commercial Paper
committed $150 million in financing for
the deal.
"IDT is commencing the offer to purchase
and consent solicitation primarily for the
purpose of enabling IDT to effect one
more more possible financing transactions involving
Net2Phone," the company said in a press release.
On April 9, shares of IDT jumped 29.4 percent following
news that Japanese software company Softbank planned to
invest in Net2Phone. See related story.
Steve Gelsi is a reporter for CBS MarketWatch.
|
