Net2Phone jumps on report AOL may increase stake
NEW YORK, Feb 14 (Reuters) - Shares of Net2Phone Inc. soared 25 percent on Monday after cable television network CNBC said Internet service provider America Online Inc. is in talks to buy a controlling interest in the Internet-based telephone company from IDT Corp.
Shares of Net2Phone, which allows users to make low-cost telephone calls across the Internet, gained 11-17/16 to 60 on Nasdaq.
Shares of telecommunications company IDT, which spun off Net2Phone last July, gained 7-7/16, or more than 30 percent, to 29-3/4 on Nasdaq.
Citing sources familiar with the talks, CNBC said AOL may purchase IDT's remaining 48 percent stake in Net2Phone for terms that could approach $70 per Net2Phone share.
AOL, which holds a 5.4 percent stake in Net2Phone, declined to comment. Net2Phone also declined to comment. A representative from IDT could not be immediately reached for comment.
Any increased investment in Net2Phone by leading online company AOL would be a strong endorsement for Internet-based telephone services, one industry analyst said.
"Internet telephony was seen as a gamble by some, but with AOL doubling-down its bet, that's a big endorsement," said the industry analyst who declined to be named.
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REUTERS
Rtr 16:11 02-14-00 |