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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.
Investor Relations
IDT Corporation
Bill Ulrey, 973-438-3838
invest@idt.net
