Polycom has dramatically pulled the plug on Mitel’s proposed $US1.9 billion acquisition of the company, scrapping the deal to go private instead.
Following a tense day of deliberating at the video conferencing vendor, over a years' worth of negotiating is now off the table after the company accepted a rival $US2 billion bid from Siris Capital Group LLC, a private equity firm based in New York.
According to Polycom, its board of directors took less than 24 hours to decide on the move.
In a move which has left the channel stunned, Polycom has officially ended the merger agreement, paying Mitel the $60 million termination fee after the vendor refused to raise its offer.
The process was set in motion when Polycom’s board of directors received a “unilaterally binding offer” from Siris to acquire all outstanding shares of Polycom common stock for a price of $12.50 per share in cash.
Consequently, the Polycom board of directors determined that Siris’ proposal constituted a “Company Superior Proposal” under its merger agreement with Mitel.
“As a result, the Polycom board of directors authorized Polycom to terminate the Mitel merger agreement, pay the Mitel termination fee and enter into the Siris merger agreement,” a company statement read.
“Polycom intends to pay the Mitel termination fee today and enter into the Siris merger agreement immediately thereafter.”
As reported by ARN in April, communications provider Mitel announced plans to acquire the videoconferencing vendor in a deal valued at approximately $US1.96 billion, as both companies continue to fight for relevance in the changing enterprise world.
Terms of the deal would have seen the combined company headquartered in Ottawa, Canada, operating under the Mitel name while maintaining Polycom's individual global brand.
“Mitel shareholders, customers and employees know that we follow a rigorous and disciplined approach to mergers and acquisitions,” Mitel President and CEO, Rich McBee, said.
“The agreement announced on April 15 resulted from a detailed due diligence and negotiation process that we feel accurately determined fair value for Polycom. We feel it would not be in the best interest of Mitel shareholders to adjust the existing agreement.
“While I am disappointed that this particular transaction will not move forward, I am confident in Mitel's future as an industry leader and as a market consolidator.”