By Josh Long

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Broadview Networks Holdings Inc. recently disclosed receiving an offer from a limited partnership affiliated with billionaire Carl Icahn to purchase 70 percent of the company.

High River Limited Partners, an Icahn Associates affiliate, proposed offering $165 million in cash equity and $10 million in loans in exchange for 70 percent of new common stock in a restructured Broadview, according to a regulatory filing. The proposal contemplates that Broadview would have no debt.

Broadview, which is seeking to restructure its operations, thought High River’s proposal was unfair. Broadview said it “values the Company significantly lower than the value implied by the plan of reorganization that the Company negotiated with material stakeholders.”

“We and our board of directors, in consultation with our advisors, have analyzed the Icahn proposal and do not consider it to be superior to the terms of the company plan,” Broadview declared in the filing, adding that it planned to pursue a reorganization plan that it described last month in a separate regulatory filing.

In a press release, High River said it holds about $51 million of Broadview’s senior secured notes. Broadview documents reportedly show the enterprise value of the telecommunications company to be between $281 million and $343 million. High River believes that valuation is inflated.

“High River believes that the Valuation Analysis materially overstates the value of the reorganized Company and is premised on projected financial results that are not achievable in our opinion,” High River said. “Among other things, the Company’s financial statements indicate that Broadview’s revenues for each of the past 12 calendar quarters, have consistently shown an annual decline of 7-13% with an average decrease of 9%. This downward trend continued and in fact accelerated in Q1 of 2012 with revenues declining 10% year over year. Given this history, we believe that it is highly unlikely that the Company will be able to achieve its revenue projection for 2012 which implies a revenue decline of only 4.7% for the remainder of the year.”

Icahn knows the competitive phone and Internet business. Broadview’s competitor, XO Communications, became a privately held competitive local exchange carrier last year after XO completed a merger agreement to sell itself to affiliates of Icahn.

“On information and belief, an affiliate of High River controls a competitor of the company,” Broadview said in the regulatory filing, possibly referring to XO.

A month ago, Broadview announced reaching an agreement with holders of its senior secured notes and major equity holders to restructure its balance sheet. The plan calls for the conversion of $300 million in senior secured notes into new five-year notes and the majority of equity in the company, according to a press release. In that same press release, Broadview revealed plans to enact a “pre-packaged” reorganization plan under Chapter 11 bankruptcy and complete the restructuring in the fourth quarter of 2012.

“While it remains subject to court approval, before, during and after this process, trade creditors, employees, sales agents and unsecured creditors are anticipated to be paid in full, on time in the normal course of business,” Broadview said.

New York-based Broadview has been losing money over at least the last few years. In the quarter ending March 31, the company reported a net loss of $5.3 million.

In an investor presentation earlier this year, Broadview said it served about 36,000 SMBs with average revenue per customer totaling $692. The company listed around 300 agent channel partners, who are responsible for just under one-quarter of new sales.