Polycom Inc. (NASDAQ: PLCM) shares made a healthy run early Friday after the company announced news that it received an offer to be acquired. Siris Capital Group submitted an offer to Polycom to acquire all outstanding shares for $12.50 per share. However, this offer is subject to Polycom terminating its existing merger agreement with Mitel Network Corp. (NASDAQ: MITL).
Ultimately, the offer will remain in effect until no later than July 15. If the Polycom/Mitel merger agreement is terminated in accordance with its terms, which Siris anticipates will occur Friday, Polycom would be permitted to accept Siris’s offer and enter into the binding definitive agreement contained in the offer. Any transaction would be subject to regulatory approval, shareholder approval and other customary closing conditions.
Polycom has informed Siris that its board of directors has unanimously determined Siris’ offer to constitute a “Company Superior Proposal” under the terms of its merger agreement with Mitel.
Polycom also has announced its intention to terminate promptly its merger agreement with Mitel, subject to the terms thereof. The all-cash transaction is valued roughly $2.0 billion, including Polycom’s outstanding debt, which represents a premium of 13.6% to the current value of Mitel’s offer, based on Mitel’s closing share price as of July 7.
Dan Moloney, Siris executive partner, commented:
Polycom has a 25-year history serving the audio and video collaboration needs of the most demanding enterprises and is a globally recognized brand synonymous with innovation and the highest quality. We are very excited for the opportunity to partner with Polycom and its leadership team, as the Company fits well with Siris’ investment focus on mission-critical telecommunications businesses. … The industry is transitioning to a hybrid on-premise and cloud-based Unified Communications environment. We believe that as an independent private company, Polycom would be best positioned to continue its heritage as a best-in-class communications solutions provider to more than 400,000 companies and institutions, channel partners, and the evolving Unified Communications ecosystem.
Shares of Polycom were last seen up almost 13% at $12.26, with a consensus analyst price target of $13.09 and a 52-week trading range of $8.79 to $14.09.
Mitel was trading up nearly 19% at $7.14. The stock has a consensus price target of $12.20 and a 52-week range of $5.91 to $9.61.
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