IDT Corporation Proposes To Acquire ITXC Corp. in Stock Transaction at 15% Premium |
NEWARK, NJ, April 10, 2003 – IDT Corporation (NYSE: IDT, IDT.C) today announced that it is proposing to acquire ITXC Corp. (NASDAQ: ITXC) in a stock-for-stock transaction that would provide a 15% premium to the stockholders of ITXC, based on the closing price of ITXC’s common stock on April 9, 2003.
IDT believes that this transaction represents a compelling opportunity for ITXC shareholders. In today’s turbulent global telecommunications industry environment, only a company that has achieved sufficient scale can survive over the long term. According to ITXC’s recent press release dated March 31, 2003, ITXC management anticipates that the company will not become free cash flow positive until the first half of 2004, by which time a significant portion of ITXC’s cash balances will have been depleted. However, IDT believes that the efficiencies created through such a combination would allow ITXC’s operations to generate free cash flow much sooner than is currently anticipated by ITXC’s management, thereby preserving ITXC’s underlying cash balances and financial strength. In addition, IDT believes that with the departure of Mr. Evslin as Chief Executive Officer, ITXC’s management team is currently in a transition phase. Therefore, we believe ITXC would greatly benefit from IDT’s experienced management team, making this a particularly appropriate time for an IDT/ITXC combination.
Accordingly, IDT has decided to present its offer directly to the stockholders of ITXC and is today publicly announcing that it intends to commence an offer to acquire all the outstanding shares of ITXC for $1.40 of IDT “Class B” common stock (NYSE: IDT) per ITXC share. Pursuant to IDT ’s proposal, following completion of the exchange offer, IDT and ITXC will merge, and each remaining share of ITXC common stock will be exchanged for $1.40 of IDT “Class B” common stock (NYSE: IDT). By presenting this offer directly to ITXC’s shareholders, IDT hopes to complete this transaction in a more expeditious manner, thereby preventing further erosion in ITXC’s market value.
IDT’s proposal represents a unique opportunity to create a dynamic telecommunications provider with considerable financial strength and liquidity. The combined company will be well-positioned to capitalize on the complementary business lines and differing strengths of IDT and ITXC, and to provide customers with superior services and prices. In addition, the combined company would take advantage of cost savings and efficiencies resulting from economies of scale.
Attached is the full text of the April 10, 2003 letter from Mr. Howard S. Jonas, Chairman of IDT, to Mr. Tom I. Evslin, ITXC’s President and CEO:
(Please click on attachment for entire release) |
Apr 10, 2003 |
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