Telephony vendor Mitel goes public with $540M bid for ShoreTel

Canadian business communications vendor Mitel is offering $540 million for ShoreTel, a U.S.-based competitor, going public with the bid after saying it was snubbed earlier this month.

Mitel and ShoreTel sell enterprise phone systems and unified communications software and services. Mitel says the industry is consolidating and it wants to be a consolidator. In January, Mitel completed its acquisition of Aastra, another Canadian communications company.

Mitel is offering $8.10 per share in cash for ShorTel, which it says is a premium of 24% over Friday's ShoreTel share price. In a letter sent Monday to ShoreTel's board of directors, the company said it had proposed a buyout to the board on Oct. 2 that was rejected. Its current offer is open until Nov. 20, Mitel said.

In a statement on Monday, Silicon Valley-based ShoreTel said it had received Mitel's proposal and would evaluate it.

The global enterprise telephony market grew just 2% in revenue in the second quarter, according to Dell'Oro Group. Sales of PBXes, the hardware switches used in enterprise telephony, are being eroded by the use of smartphones and instant messaging, while many enterprises are looking toward cloud-based telephony services instead of buying on-premises equipment, Dell'Oro said. Both Mitel and ShoreTel offer cloud-based services.

Cisco Systems led the world in PBX sales in the second quarter, measured in terms of lines sold, Dell'Oro said. Mitel led in line shipments in the Europe, Middle East and Africa (EMEA) region. ShoreTel lagged behind Mitel in PBX lines shipped even in its home market of North America. Mitel says the companies' market footprints are complementary.

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com

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