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IDT Reaches Out to Acquire Net2Phone

After a protracted courtship dance, IDT Corp. is swallowing up Net2Phone Inc., agreeing to pay an estimated $28.1 million to gain full control of the voice-over-Internet-protocol service provider.

A multinational fiber-optic-backbone operator, Newark, N.J.-based IDT has been trying for more than eight months to fully connect with Net2Phone. It first made a bid in June for the VoIP provider’s outstanding shares -- a bid that was rejected by Net2Phone’s independent evaluation committee. IDT already owns 87.2% of Net2Phone’s voting stock.

Under the pending merger agreement, IDT will merge Net2Phone with its existing NTOP Acquisition Inc. subsidiary under the Net2Phone name. If the merger goes through, stockholders outside of the IDT share block will receive $2.05 in cash per share -- the same price IDT paid in January to buy up 31.6 million in Net2Phone shares.

After the merger, IDT will take the combined company private, operating Net2Phone as a wholly owned IDT subsidiary. Net2Phone’s stock will be delisted from the NASDAQ National Market board.

Net2Phone offers an all-in-one VoIP service including systems and management to small and midsized cable operators. It has landed deals with several operators in the United States, including Millennium Digital Media, Cequel III LLC, Bresnan Communications and Atlantic Broadband Inc.