ShoreTel has snubbed a second takeover approach from rival comms vendor Mitel, branding its $8.50-a-share (£5.39) offer "highly inadequate".
After seeing its initial $8.10-a-share cash offer rejected by ShoreTel on 27 October, on Monday Mitel upped its bid to $8.50, comprising $8.10 per share in cash and $0.40 per share in Mitel common stock.
But "after careful consideration", California-based ShoreTel's board has unanimously rejected the revised, unsolicited proposal from its Canada-based rival, which bought another comms vendor – Aastra – earlier this year.
The offer "significantly undervalues ShoreTel and its strong prospects for continued growth and value creation", the NASDAQ-listed firm said. Neither is it in the best interests of its stockholders, it added.
"We are confident that executing our strategic plan is the best path forward and will deliver substantially more value to ShoreTel stockholders than Mitel's significantly inadequate proposal," said ShoreTel chief executive Don Joos.
ShoreTel's Q1 earnings report – which showed non-GAAP net profit rising 17 per cent to year on year $4.7m on revenues that jumped seven per cent to $90.4m – demonstrates the vendor is "driving improved financial performance and value creation", Joos added.
Mitel is now almost three times as large as ShoreTel in revenue terms following its gobbling up of Aastra in January. In its latest quarter, revenues more than doubled year on year to $272m.
Mitel chief executive Richard McBee said of the revised offer: "We continue to believe that the combination of our two companies offers a compelling opportunity to add sustained value to both organisations, and to solidify our combined leadership position in a highly competitive and rapidly consolidating market.
"In addition to the obvious benefit of an immediate and significant premium for ShoreTel shareholders, a combination of our two companies would create far superior value than could reasonably be obtained by ShoreTel as a standalone entity."
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