Mitel Networks Corp (NASDAQ: MITL) is rocketing for the top in the market this morning, and for good reason. News broke in the pre-market hours that the company has entered into a definitive agreement to be acquired. Of course, this led to excitement among investors, sending the stock screaming for the top. Today, we’ll talk about:
- The takeover news;
- what we’re seeing from MITL in the market as a result; and
- what we’ll be watching for ahead.
MITL Heads For The Top On Acquisition News
As mentioned above, Mitel Networks is having an incredibly strong start to the trading session this morning after announcing that the company will soon be acquired. In a press release issued early this morning, the company announced that it has signed a definitive agreement to be acquired. The buyer is an investor group led by affiliates of Searchlight Capital Partners, who will purchase MITL in an all-cash transaction. Under the terms of the agreement, MITL shareholders will receive a cash payment in the amount of $11.15 per share, representing a premium over the company’s 52-week and last three-year-high price in the amount of approximately 24%. In a statement, Terry Matthews, Co-founder and Chairman of Mitel, had the following to offer:
Mitel has succeeded for 45 years because of persistent innovation and relentless focus on delivering shareholder value. Our Board determined that this transaction, upon closing, will deliver immediate, significant and certain cash value to our shareholders. It also affirms the tremendous value and market leadership of Mitel. We believe this transaction will provide Mitel with additional flexibility as a private company to pursue the company’s move-to-the-cloud strategy.
The above statement was followed up by Rich McBee, CEO at MITL. Here’s what he had to offer:
This transaction is an exciting next step in our multi-year transformation that has enabled Mitel to emerge as an industry leader in the largest markets in the world. As a private company, and with the strategic and capital support of the Searchlight funds, we will have greater flexibility to manage the transition in our market, accelerate our strategy, and drive the next phase of success for our customers, partners, and employees.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that the news moves the market. In this particular case, the news proved to be overwhelmingly positive. After all, Mitel being acquired at a premium means an instant return for investors. So, it’s no surprise that the stock is making a run for the top. As is almost always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (10:17), MITL is trading at $11.28 per share after a gain of $1.12 per share (10.98%) thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on MITL. In particular, we’re interested in following the story surrounding the acquisition. While the acquisition is not subject to financial closing conditions as the funds are already secured, it is subject to other customary closing conditions and regulatory approval. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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