With the clock ticking toward the Nov. 20 deadline, Mitel sweetened the pot Monday in its attempt to acquire California-based ShoreTel Inc.
The original offer, first issued Oct. 20, was for $540 million in cash, but that was rejected by the ShoreTel (Nasdaq:SHOR) board of directors.
In an open letter to ShoreTel’s chairman, Mitel CEO Rich McBee increased the bid to ShoreTel shareholders to $8.50 a share as well as 40 cents per share in Mitel (TSX:MNW) (Nasdaq:MITL) common shares. The total equity value of the deal now stands at around $574 million.
OBJ360 (Sponsored)
What we do Founded in 1989, Options Housing is a non-profit organization committed to preventing and ending homelessness in Ottawa. We focus on helping people get out of shelters, off
What we do Level is a national justice education and human rights charity in Canada. We work to advance human rights and remove barriers to equity and justice through community-focused
“We continue to believe that the combination of our two companies offers a compelling opportunity to add sustained value to both organizations,” Mr. McBee wrote.
He also wrote that ShoreTel faces a number of challenges as a standalone company, and that while its board has not engaged in any discussions, some ShoreTel shareholders have met with Mitel and “support the logic and understand the benefits of a combination of our two companies.”
Mr. McBee wrote that the shareholders said there were three key areas where they believed a Mitel acquisition could deliver more value for ShoreTel.
Right now, Mitel is fourth and ShoreTel fifth in the cloud-based telephony market. Combined, they would “create the industry’s fastest-growing cloud business,” No.1 in market share by revenue and No. 2 in recurring cloud seats.
Secondly, the shareholders believe combining the companies is the best way to drive recurring revenue, Mr. McBee wrote.
Third, Mr. McBee wrote, the shareholders believe Mitel is best-suited to deliver near-term operational and executional efficiencies.
The offer remains on the table until 5 p.m. on Nov. 20.