Category Archive Business Telephone Systems

Polycom, Mitel shares soar after acquisition is terminated

Cloud technology, computer software

Yongyuan Dai | Getty Images

Polycom and Mitel shares each rose amid the news that Polycom disappointedly canceled deal it had with the Canadian telecom firm Mitel, and agreed to be bought by Siris Capital Group.

Polycom stock rose almost 13 percent, while Mitel stock rose nearly 20.  Siris Capital, a Private equity firm overshadowed Mitel’s $1.96 billion offer with a $2 billion, or $12.50 per share, cash bid.

“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,” said Dan Moloney, executive partner at Siris, in a statement Friday.

 I want to use Polycom’s audio and video collaboration to move into a cloud-based environment.

“While I am disappointed, I am confident in Mitel’s future as an industry leader and as a market consolidator,” said Rich McBee, president of Mitel in a Friday statement. He indicated that the company would not adjust the prior agreement.

Jonathan Kees, an analyst with Summit Redstone, told CNBC that shares were up so much because of three reasons.

“First, they’re getting $60 million in break-up fees,” he said. “Second, they don’t need to issue additional equity to fund the deal.”

Lastly, “They’re getting more respect from investors because they didn’t overpay,” Kees said. “Mitel could’ve to counter offered, but they didn’t.”

Polycom will pay a $60 million termination fee, the New York-based firm said.

Mitel’s U.S.-listed shares traded at $7.21 a share, while Polycom traded near $12.25 per share. Mitel and Polycom shares have dropped more than 12 and 2 percent this year, respectively.

At Aastrcom we are proud to offer equipment from both Mitel and Polycom.

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