Arbinet-thexchange, Inc. (NDAQ:ARBX) is a takeover candidate that has
not received much press. Two days ago, Singer Children's Management
Trust disclosed a 7.04% stake in the company and expressed its concern
over the company's future. Particularly, the hedge fund believes it is
in the best interest of shareholders for the company to pursue a sale.
Around
October 23, 2006, the company formed a special committee to review
strategic alternatives and hired Jefferies & Company as its
financial advisor. These strategic alternatives included a possible
sale or merger of the company. Seven months later, however,
shareholders are still waiting for the results. Singer demanded that if
the company has tangible results, including a potential buyer, they
should immediately disclose it to shareholders.
Is the company
simply delaying the announcement of an unsuccessful review? Well, Tom
Watts, an analyst with Cowen & Co. suggested that there is demand
for a company like Arbinet after the $55 million merger last year of
the international wholesale voice business of Royal KPN with iBasis. He
said it is just a matter of finding those potential buyers and seeing
what they're willing to pay. Morover, the company's former chairman and
CEO indicated he would pursue a bid for the company, but has not
publicly disclosed an offer.
So, where do things stand now? In a
conference call on Tuesday to discuss first-quarter earnings, CEO Curt
Hockemeier declined to discuss the company's strategic review, saying
only that it continues. We do know, however, that its professional fees
increased to $1.1 million stemming from the review! Whether or not the
company has found a buyer remains to be seen, but patience is quickly
running out...
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