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Mitel Pursues Purchase of Reluctant ShoreTel
Mitel issued a press release today announcing an offer of $8.10 per share to acquire all of ShoreTel's outstanding stock, a deal that would be worth about $540 million. Mitel also revealed that ShoreTel had rejected a similar offer earlier this month, and published a letter that Mitel CEO Rich McBee sent to ShoreTel Chairman Charles Kissner. McBee's October 20 letter reads in part:
Dear Chuck: I was disappointed by your Board's rejection of our [October 2] written proposal to acquire ShoreTel, Inc. for $8.10 per share in cash and your refusal to engage with us. Our proposal, which represents a 24% premium to Friday's closing price and a 30% premium to ShoreTel's enterprise value, would deliver immediate, certain value to ShoreTel's stockholders, which we believe is far superior to what you can reasonably expect to achieve as a standalone company. We believe that a transaction between our two companies would be well received by your shareholders, and we are committed to providing them with an opportunity to express their views on our proposal.
McBee concludes his letter by stating that the offer will remain open until November 20, 2014.
The release of McBee's letter seems timed to put the issue of a Mitel acquisition on the table before ShoreTel's scheduled fiscal 1Q2015 earnings call, slated for this Thursday, October 23.
ShoreTel reported revenues of $339.8 million for its fiscal year 2014, which ended June 30. In its latest quarterly report, on August 7, Mitel announced revenues of $288.7 million for its 2Q2014
If Mitel were to succeed in acquiring ShoreTel, the move would further solidify Mitel as a company driving consolidation in the enterprse communications marketplace. Last year, Mitel acquired Aastra, and Mitel has also acquired contact center vendors PrairieFyre and Oaisys.
We've reached out to ShoreTel, seeking comment, and will be updating this story throughout the day.