Mitel backs away from Polycom takeover after rival offers US$2 billion cash

OTTAWA – A friendly Canadian takeover of California-based Polycom has been called off on amicable terms after Mitel Corp. decided it wouldn’t match a rival offer.

The two companies say Ottawa-based Mitel will receive a US$60 million termination fee from Polycom under an agreement announced in April, valued at the time at US$1.96 billion in cash and stock.

Since then, Mitel shares have dropped and the offer’s value has fallen to about US$11 per Polycom share from US$13.68 on April 15.

Polycom has now decided to support a rival takeover offer from Siris Capital Group LLC, which is offering US$12.50 per share in cash — a deal valued at US$2 billion, or about 13.6 per cent above the recent value of Mitel’s bid.

The Mitel-Polycom deal would have combined two companies with global expertise in video conferencing technology and workforce collaboration tools.

Under the new deal, Polycom will be acquired by a private equity company that invests primarily in North American technology businesses. Siris has given Polycom shareholders until July 15 to accept its offer, subject to regulatory approvals.