UPDATED: ShoreTel rejects telephony vendor Mitel's bids
- 21 October, 2014 07:41
UPDATE 12/11/14: ShoreTel has rejected both Mitel Networks' first and a subsequent higher bid, declaring it "significantly undervalued" the company.
ShoreTel board chairman, Charles Kissner, said in a statement the new proposal was highly inadequate and was an opportunistic attempt to acquire ShoreTel.
Mitel had raised its offer to $US8.50 per share in cash and stock.
ORIGINAL STORY: Canadian business communications vendor, Mitel, is offering $US540 million for ShoreTel, a US-based competitor, going public with the bid after saying it was snubbed earlier this month.
Mitel and ShoreTel sell enterprise phone systems and unified communications software and services. Mitel says the industry is consolidating and it wants to be a consolidator. In January, Mitel completed its acquisition of Aastra, another Canadian communications company.
Mitel is offering $US8.10 per share in cash for ShorTel, which it says is a premium of 24 per cent over Friday's ShoreTel share price. In a letter sent Monday to ShoreTel's board of directors, the company said it had proposed a buyout to the board on October 2 that was rejected. Its current offer is open until November 20, Mitel said.
In a statement, Silicon Valley-based ShoreTel said it had received Mitel's proposal and would evaluate it.
The global enterprise telephony market grew just 2 per cent in revenue in the second quarter, according to Dell'Oro Group. Sales of PBXes, the hardware switches used in enterprise telephony, are being eroded by the use of smartphones and instant messaging, while many enterprises are looking toward cloud-based telephony services instead of buying on-premises equipment, Dell'Oro said. Both Mitel and ShoreTel offer cloud-based services.
Cisco Systems led the world in PBX sales in the second quarter, measured in terms of lines sold, Dell'Oro said. Mitel led in line shipments in the Europe, Middle East and Africa (EMEA) region. ShoreTel lagged behind Mitel in PBX lines shipped even in its home market of North America. Mitel says the companies' market footprints are complementary.