ShoreTel's board of directors has rejected Mitel Networks' $540 million unsolicited bid to acquire the company, saying that it undervalues the company and its growth prospects.
"After careful evaluation, ShoreTel's Board of Directors has determined that Mitel's proposal significantly undervalues ShoreTel and fails to reflect the upside of ShoreTel's growth initiatives and technology developments," said Chuck Kissner, chair of ShoreTel's board of directors, in a release. "We believe Mitel's proposal is financially inadequate, is an opportunistic attempt to acquire ShoreTel's assets, and is not in the best interests of ShoreTel stockholders."
As previously reported, Mitel proposed to acquire all of ShoreTel's outstanding shares for $8.10 per share in cash. This is the second time that ShoreTel's board rejected Mitel's bid for the company.
ShoreTel said it plans to continue with a three-pronged growth strategy that includes: driving growth in the unified communications space by increasing customer bookings for its cloud products; completing the development of a common next-gen platform that it says can be deployed across cloud, hybrid and on-premises environments; and maintaining customer service and satisfaction.
The company also pointed out that it has achieved organic revenue growth for the past six consecutive quarters, with year-over-year hosted revenue growth of 27 percent in fiscal 2014, and an expansion of recurring revenue to 39 percent of total revenue.
For its part, Canada-based Mitel hoped to acquire ShoreTel as part of a broader effort to expand its presence in the United States, particularly in the Unified Communications as a Service (UCaaS) space.
- see the release
Mitel offers $540M for ShoreTel as part of U.S. expansion effort
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