Net2Phone (NASDAQ:NTOP)
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IDT Corporation (NYSE: IDT, IDT.C), an international
telecom, entertainment and technology company, and Net2Phone, Inc.
(NASDAQ: NTOP), a leading Voice over IP (VoIP) enabler for service
providers, jointly announced today that they have executed a merger
agreement, dated February 17, 2006, providing for the acquisition of
Net2Phone by IDT. Under the terms and subject to conditions described
in the merger agreement, NTOP Acquisition, Inc., a wholly-owned
subsidiary of IDT, would merge with and into Net2Phone, with Net2Phone
continuing as the surviving corporation. If the merger is consummated,
each issued and outstanding share of common stock and Class A common
stock of Net2Phone, other than shares held by IDT or its subsidiaries
or as to which dissenters' rights have been perfected, will be
canceled and converted automatically into the right to receive $2.05
in cash, without interest. This is the same price per share paid by
IDT in its tender offer for Net2Phone common stock that expired after
a subsequent offer period on January 27, 2006, in which IDT acquired
approximately 31.6 million Net2Phone shares.
Following the merger, Net2Phone will be a privately held,
wholly-owned subsidiary of IDT, and shares of Net2Phone common stock
will cease to be quoted on the Nasdaq National Market and will be
deregistered under the Securities Exchange Act. The aggregate
consideration payable in the merger would be approximately $28.1
million.
The transaction has been approved unanimously by both the
Net2Phone board of directors, following the recommendation of the
Independent Committee of the Net2Phone board of directors, and the IDT
board of directors. During the course of its deliberations, the
Independent Committee has been advised by Kirkland & Ellis, LLP as
legal advisor and The Blackstone Group, L.P. as financial advisor.
Prior to making its determination, the Independent Committee received
the opinion of The Blackstone Group, L.P. that, as of February 16,
2006 and subject to certain qualifications set forth in the opinion,
the consideration of $2.05 per share in cash, without interest, in the
proposed merger is fair to the holders of shares of Net2Phone's
capital stock (other than IDT and its subsidiaries) from a financial
point of view.
Net2Phone expects to file solicitation materials with the
Securities and Exchange Commission (the "Commission") to seek
stockholders' written consents to approve and adopt the merger and the
merger agreement as promptly as practicable, and expects to close the
merger promptly following receipt of the requisite stockholder
approval, subject to the closing conditions described in the merger
agreement. The Net2Phone board of directors is recommending that
Net2Phone's stockholders approve the transaction.
As of February 1, 2006, Net2Phone shares beneficially owned by IDT
represented approximately 87.2% of the voting power of Net2Phone's
outstanding capital stock. IDT has informed the Independent Committee
that it intends to grant its consent in favor of the merger agreement
and the merger. The consent of the shares controlled by IDT is
sufficient under Delaware law to adopt the merger agreement and
approve the merger. Accordingly, if the other conditions in the merger
agreement are satisfied, Net2Phone is likely to complete the merger
whether or not its remaining shareholders grant their consent.
About Net2Phone
Net2Phone provides VoIP PacketCable, SIP and wireless solutions
around the world. As a leader in turn-key hosted VoIP telephony
services, Net2Phone has routed billions of VoIP minutes globally,
servicing more than 100,000 users in the US as well as hundreds of
thousands of more overseas. Net2Phone provides partners with a
SIP-based broadband telephony solution, calling cards, prefix dialing
and enterprise services in over 100 countries. Net2Phone's PacketCable
platform provides cable operators with the ability to deliver a high
quality primary line-type service with features such as emergency
calling. For more information about Net2Phone's products and services,
please visit www.net2phone.com.
About IDT
IDT Corporation, through its IDT Telecom subsidiary, is a
facilities-based, multinational carrier that provides a broad range of
telecommunications services to retail and wholesale customers
worldwide. IDT Telecom, by means of its own international
telecommunications backbone and fiber optic network infrastructure,
provides its customers with integrated and competitively priced
international and domestic long distance and domestic all-distance
telephony and prepaid calling cards. IDT Corporation directly and
through its wholly-owned subsidiaries beneficially owned approximately
64.8 million shares of Net2Phone capital stock representing
approximately 82.5% of Net2Phone's outstanding equity interest and
approximately 87.2% of Net2Phone's voting interest as of February 1,
2006.
Important Additional Information and Where to Find It
Net2Phone will file with the SEC a consent solicitation statement,
and Net2Phone and IDT will file with the SEC other documents,
regarding the proposed merger referred to in this press release.
Investors are urged to read the solicitation statement and other
relevant materials when they become available because they will
contain important information. A definitive solicitation statement
will be sent to Net2Phone stockholders seeking their consent for the
transaction. Investors may obtain a free copy of the solicitation
statement and other documents filed by Net2Phone with the Commission
at the Commission's website at www.sec.gov, or by directing a request
to: Net2Phone, Inc., 520 Broad Street, Newark, NJ 07012, Attention:
Investor Relations. Investors may also obtain a free copy of any
documents filed by IDT with the Commission at the Commission's website
at www.sec.gov, or by directing a request to: IDT Corporation, 520
Broad Street, Newark, NJ 07012, Attention: Investor Relations,
Telephone: (973) 438-1000. A copy of this press release will be
available on IDT's website at www.idt.net in the "About IDT" Press
Releases section.
Howard S. Jonas, a director of the Company, and James A. Courter,
Vice-Chairman of the Company's board of directors, are also directors
of IDT and will be subject to Rule 13e-3 promulgated under the
Securities Exchange Act of 1934. In addition, Net2Phone and its other
officers and directors may, under the rules of the Commission, may be
deemed to be participants in the solicitation of consents in
connection with the proposed merger. Investors may obtain additional
information regarding the interests of such participants by reading
the solicitation statement when it becomes available.