IDT Corporation Announces Strategic Initiatives, Including Dividends, a Spin-off and an Exchange Offer
November 05 2010 - 5:15PM
Business Wire
IDT Corporation (NYSE: IDT, IDT.C) today announced a series of
strategic moves, including dividends, that establish a framework
for long term appreciation of shareholder value.
On November 2, 2010, IDT’s Board of Directors authorized an
initial cash dividend of $0.22 per share to be paid on or about
November 23rd to shareholders of record at the close of business on
November 15th of IDT Corporation Common Stock, Class A Common Stock
and Class B Common Stock. IDT expects to announce an additional
cash dividend of comparable magnitude during the second quarter of
IDT’s 2011 fiscal year, the three months ending January 31, 2011.
The Board also stated its intent for IDT to pay future quarterly
dividends based on operating performance and available
resources.
At the same meeting, the Board approved the launch of an offer
to exchange one share of Class B Common Stock (NYSE: IDT) for each
share of Common Stock (NYSE: IDT.C) outstanding. As of November
4th, 2010, there were 3,728,655 shares of IDT Common Stock
outstanding. The exchange offer is being made in light of the
limited liquidity in the market for the Common Stock and the
resulting disparity in the trading prices for the two classes
despite the fact that the equity rights associated with the shares
of each class are nearly identical.
Following the completion of the exchange offer, the Common Stock
may be delisted from the NYSE. Howard Jonas, who controls
approximately 76% of the combined voting power of IDT’s outstanding
capital stock, will adjust his holdings of IDT Class A Common Stock
and Common Stock so as not to increase his combined voting power as
a result of the exchange offer.
The exchange offer will commence when the definitive materials
(including an Offer to Exchange and Letter of Transmittal) are
filed with the Securities and Exchange Commission and made
available to IDT’s stockholders and will remain open for at least
twenty business days. IDT will file with the Securities and
Exchange Commission and mail to stockholders exchange offer
documents with full details of the offer, including complete
instructions on the exchange process procedure along with the
transmittal forms and other data when the offer is commenced.
In addition, the Board has directed management to pursue a
spin-off of its Genie Energy division. The spinoff of Genie Energy
under consideration is intended to be tax-free to IDT stockholders.
Genie Energy would include:
- IDT Energy, an energy services company
operating in New York, New Jersey and Pennsylvania;
- American Shale Oil Corporation (AMSO),
which holds IDT’s interest in the a joint oil shale venture with
Total, SA operating in Western Colorado;
- Israel Energy Initiatives (IEI), which
holds a majority interest in an oil shale venture in Israel,
and;
- Certain related smaller initiatives,
and the cash resources necessary to execute on those projects.
The Board also directed management to explore options to license
and defend certain intellectual property rights currently owned by
IDT Telecom and Net2Phone related to VoIP and other aspects of the
telecommunications industry including a possible spin-off of a
separate entity.
“The moves that we are announcing today provide a framework that
will help shareholders realize the underlying value of IDT’s
businesses and holdings,” Howard Jonas, Chairman and CEO of IDT
said.
“Since completing our restructuring program, both of our core
IDT Telecom and Genie Energy businesses have demonstrated their
capacity to generate sustained, positive cash flow,” Jonas added.
“The near term dividends will allow shareholders to reap the
benefits of those improvements, while future dividends will reflect
the performance of IDT Telecom and the other businesses that will
remain at IDT. The exchange offer is intended to simplify our
capital structure, promote efficiencies and level the playing field
for the holders of our two classes of public equity. The spin-off
of Genie Energy will enable both Genie and IDT Telecom to focus on
their respective growth strategies and more effectively meet their
long term capital requirements while providing investors with
industry focused investment vehicles.”
In this press release, all statements that are not purely about
historical facts, including, but not limited to, those in which we
use the words “believe,” “anticipate,” “expect,” “plan,” “intend,”
“estimate, “target” and similar expressions, are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. While these forward-looking statements
represent our current judgment of what may happen in the future,
actual results may differ materially from the results expressed or
implied by these statements due to numerous important factors,
including, but not limited to, those described in our most recent
report on SEC Form 10-K (under the headings “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations”), which may be revised or supplemented in
subsequent reports on SEC Forms 10-Q and 8-K. We are under no
obligation, and expressly disclaim any obligation, to update the
forward-looking statements in this press release, whether as a
result of new information, future events or otherwise.
About IDT Corporation:
IDT Corporation (www.idt.net) is a consumer services company
with operations primarily in the telecommunications and energy
industries. IDT Corporation's Class B Common Stock and Common Stock
trade on the New York Stock Exchange under the ticker symbols IDT
and IDT.C, respectively.
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