Mitel offers $540 million for ShoreTel to expand in U.S

Reuters News
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Posted: Oct 20, 2014 9:38 AM

(Reuters) - Mitel Networks Corp, a provider of business communications services, offered to buy smaller U.S. peer ShoreTel Inc for about $540 million as part of efforts to expand in the United States.

Kanata, Ontario-based Mitel's cash offer of $8.10 per share represents a 24 percent premium to ShoreTel stock's closing price on Friday.

Sunnyvale, California-based ShoreTel's shares were up at $7.58 - just below the offer price - in early trading on Monday.

Mitel's shares were up about 1 percent at C$9.61 on the Toronto Stock Exchange, its Nasdaq-listed shares were up 3 percent at $8.67.

Mitel said it made its offer public after ShoreTel's board rejected an earlier proposal sent on Oct. 2 and refused to engage with the company.

Mitel Chief Executive Richard McBee said a deal would bring together two companies "with strong and complementary market footprints, particularly in the U.S. where ShoreTel does more than 90 percent of its business."

A spokesman for ShoreTel was not immediately available for comment.

Mitel said its offer would remain open until 5:00 p.m. ET on Nov. 20.

Mitel in November bought smaller Canadian rival Aastra Technologies Ltd in a deal for C$392 million ($374 million) to expand in Europe.

(Reporting by Narottam Medhora and Swetha Gopinath in Bangalore; Editing by Simon Jennings and Sriraj Kalluvila)