ITXC Corp. today rejected a big by IDT Corp., which yesterday had announced its intention to make an offer to purchase ITXC shares for $1.40 in IDT Class B common stock. ITXC shares closed at $1.22 per share on April 9.
The ITXC board of directors made an initial determination that the IDT proposal would not be in the shareholders' interests. ITXC cash and cash equivalents were approximately $1.70 per share at the end of the first quarter of 2003. Furthermore, the company's net book value per outstanding share exceeded $2.65 per share at March 31, 2003. Moreover, ITXC has proprietary technology, much of which is patent protected, which has made the company the acknowledged market share leader in International VoIP, according to ITXC. ITXC's network spans more than 175 countries and it has hundreds of carrier customers including some of the largest in the world.
"As a shareholder, I view this proposal as totally unacceptable," said ITXC Chairman and CEO Tom Evslin. "It's below our cash and cash equivalents. It gives no value to our vast network, our physical assets, our customer base or our technology. Moreover, the announced consideration is in the form of Class B IDT stock. While IDT has a very complex and difficult holding company structure, it failed to mention in its publicly disclosed letter that Class B common stock only has one tenth the voting rights of some voting shares of IDT, and one thirtieth the voting rights of other shares, further diminishing the value of the proposed offer. IDT has itself reported losses in its most recent quarters."
"IDT's letter states that IDT welcomes amicable negotiation. Its actions today suggest a very different process. Amicable negotiations do not commence through letters released to the media."
Evslin intends to retire from his position as CEO when a suitable replacement is found, and says his interest in this proposal is the same as that of any other shareholder: "This valuable company should not be sold at a price which deprives shareholders of the value to which they are entitled."
Today, ITXC also announced that the board has approved a shareholder rights plan and declared a dividend of one right on each outstanding share of ITXC common stock. The record date for the dividend will be April 21, 2003.
