Video conferencing equipment maker Polycom Inc said on Monday it received a revised proposal from a private equity firm that could be “superior” to Mitel Networks Corp‘s offer.
San Jose, California-based Polycom’s shares rose 4.2 percent to US$11.56 in after-market trading.
Polycom, which agreed to be bought by Ottawa-based Mitel for about US$1.96 billion in April, said it intends to engage in discussions with the private equity firm, identified as Sponsor 1.
Under the revised proposal, Polycom stockholders would receive a cash dividend of US$11 per share and the private equity firm would purchase US$650 million in shares of a new convertible preferred stock of Polycom.
After the proposed deal, Sponsor 1 would own 56 percent of Polycom’s outstanding equity on an as-converted basis.
Under Mitel’s offer, Polycom stockholders will get US$3.12 in cash and 1.31 Mitel shares for each of their shares.
U.S. hedge fund Elliott Management, which holds a 6.6 percent stake in Polycom and a 9.7 percent stake in Mitel, has been pushing the companies to merge since October.
Mitel said in a statement on Monday that its acquisition offers superior and greater upside to Polycom.
Sponsor 1, which has been in merger talks with Polycom since 2015, sent Polycom a revised proposal in May.
Update: Mitel is a portfolio company of U.S. private equity firm Francisco Partners and Canadian private investment firm Wesley Clover International Corp.
(Reporting by Kshitiz Goliya in Bengaluru; Editing by Maju Samuel)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)
Photo courtesy of Mitel Networks Corp