Polycom Receives Revised Offer From Second Potential Buyer
May 23 2016 - 9:20PM
Dow Jones News
Polycom Inc., which had agreed to be bought out by Canadian
telecommunications company Mitel Networks Corp., on Monday
disclosed a revised offer from a second buyer that could derail the
nearly $2 billion Mitel deal.
Shares of Polycom, down 17% over the past 12 months, rose 4% to
$11.56 in after-hours trading.
Under the terms of the revised offer, which Polycom said may
constitute a "superior" or financially more favorable proposal for
Polycom shareholders, the unidentified private-equity firm
presented two plans: an $11-a-share cash dividend, or the choice to
trade the dividend for a new convertible preferred stock; or a
"take private" deal of $11.50-a-share in cash with a contingent of
up to $3 a share.
In both cases, Polycom said, the cash dividend, existing debt
and the $60 million termination fee to Mitel would be paid using
proceeds from the sale of preferred stock, $870 million in new debt
and available cash.
Mitel countered its merger proposal was superior, saying Polycom
shareholders will own 60% of the combined company.
"The deal also offers certainty of committed financing in an
uncertain and volatile debt market, and attractive synergy value,"
Mitel said Monday afternoon in a prepared statement.
Polycom said its board still recommends the Mitel merger.
The deal is projected to close this summer.
Mitel and Polycom were initially brought together by Paul
Singer's Elliott Management Corp., one of the so-called activist
investors whose victories include EMC Corp.'s decision to sell
itself to Dell Inc.
The New York hedge fund, which holds a 6.5% stake in Polycom and
a 9.7% stake in Mitel, had said Polycom's video and group
conferencing technology would fit well with Mitel's phone and
mobile products and laid out a plan under which the combined
company would then try to buy ShoreTel Inc., another of its
investments.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
May 23, 2016 21:05 ET (01:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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