International wholesale VoIP carrier IBasis (news) [a subsidiary of KPN (NYSE:KPN, news)] rejected an offer from majority shareholder KPN (NYSE:KPN, news) late last week. The offer of $1.55 per share was made three weeks ago, and represented just a 19% premium above the stock price. That stock price immediately jumped to $1.80 and above, implying that investors expected a revised offer. So this move by Ibasis's board isn't surprising anyone. Comparing how KPN's bid for Ibasis and Carl Icahn's bid for XO have gone is quite fascinating. Both have special committees of independent directors whose task is to evaluate whether the deals are in the best interest of minority shareholders. But can you imagine this language emanating from XO's special committee?
"After carefully analyzing KPN’s unsolicited tender offer with independent financial and legal advisors, the Special Committee unanimously concluded that it is opportunistic, grossly inadequate and not in the best interests of iBasis' minority stockholders," said W. Frank King, Chairman of the Special Committee of iBasis’ Board of Directors. "Basis today is a leading wholesale carrier of international long distance calls KPN’s offer significantly undervalues the Company’s current performance and long-term prospects and fails to compensate minority stockholders for iBasis' substantial growth opportunities and the numerous initiatives that are underway and expected to meaningfully contribute to the Company's earnings. Furthermore, as KPN and its representatives on the iBasis Board are well aware, iBasis recently completed the integration of KPN's international wholesale long distance voice business, which is now delivering important near- and long-term benefits. In addition, we believe the offer was timed to exploit the Company’s depressed stock price."
So what price *would* be fair? They didn't happen to mention that. The market seems to think KPN will raise its bid but not above $2, and I expect that is precisely what will happen. But we should remember that fighting words from minority shareholders don't erase the fact that the majority is so named for a reason. They'll probably get what they want in the end if they want it badly enough.