Topic: Growth Stocks

Stock Pickers Digest Hotline – Friday, October 24, 2014

Article Excerpt

MITEL NETWORKS, $9.49, symbol MNW on Toronto, has offered to buy ShoreTel Inc. (symbol SHOR on Nasdaq) for $540 million U.S. in cash. However, ShoreTel has rejected the $8.10 U.S.-a-share bid. Ottawa-based Mitel provides business phone systems and communications-focused software, while Sunnyvale, California-based ShoreTel makes phone and contact centre systems and software. The acquisition would be a good fit for Mitel, because ShoreTel does more than 90% of its business in the U.S. That would let Mitel quickly expand its phone and contact centre systems business in that market. As well, Mitel aims to move increasingly toward cloud-based products. This is where software and services are sold through subscriptions accessed over the Internet rather than as one-time sales. ShoreTel is well advanced in this area. ShoreTel’s shares are trading at $7.91 U.S. That’s below Mitel’s bid, and indicates that investors are not expecting a rival bid. Even so, Mitel may need to raise its offer to win the support of ShoreTel’s board of…