(Reuters) – Private equity firm Apax Partners has been talking with Polycom Inc (PLCM.O) to take the U.S. video conferencing company private for more than $3 billion, the Financial Times said.
The news sent Polycom shares up 12 percent to $34.14, their highest since August 2007. They were trading up 9 percent at $33.25 Wednesday on Nasdaq.
Apax has been in negotiations with Polycom since November and has been working towards making a formal offer, expected to be at around $37 a share, before the end of this month, the paper said.
“If it’s a real bid, it’s a very generous offer,” Wells Fargo Securities analyst Jess Lubert said. “I would not be surprised to see them take it.”
A deal could now prove unfeasible due to a surge in Polycom’s shares since talks began, the paper cited people close to the situation as saying.
Polycom’s shares are up 56 percent since hitting a low of $21.17 on Nov. 30.
Polycom and Apax declined to comment.
The video conferencing market has been at the center of rising consolidation. Networking giant Cisco Systems Inc (CSCO.O) plans to acquire Polycom’s Norwegian rival, Tandberg (TAA.OL). In December, Logitech (LOGN.VX) acquired privately held video conferencing firm LifeSize Communications for $405 million.
Polycom and Tandberg control three-fourths of the video conferencing products market, which is expected to nearly double to $3.8 billion by 2013, according to market research firm Gartner.
Apax’s technology and telecoms investments include Kabel Deutschland [KABLD.UL], NXP Semiconductors, TDC (TDC.CO) and Versatel Deutschland, according to its website.
Apax doesn’t really have much of a presence in enterprise networking, its current tech focus being more on the service provider side, Lubert said.
“This is a bit of a different transaction than what they’re historically used to doing.”
Private equity firm Silver Lake Partners, Hewlett-Packard (HPQ.N), Alcatel-Lucent (ALUA.PA), Avaya Inc and Japanese consumer electronics giants Sony Corp (6758.T) or Panasonic Corp (6752.T) have been named as potential buyers of Polycom by analysts. (Reporting by S. John Tilak; Editing by Maju Samuel)