Mitel stock pops to multi year high after Searchlight makes privatization bid

TORONTO _ Mitel Networks Corp. stock jumped nearly 10 per cent to a multi-year high Tuesday after it announced that its board is recommending a friendly privatization offer by an investor group led by Searchlight Capital Partners.

Shares of the Ottawa-based company, which makes communication equipment for offices and call centres, closed at US$11.12 at the Nasdaq stock market and C$14.29 in Toronto, up $1.25 or 9.6 per cent from Monday’s close.

Combined with assumed debt, the Searchlight offer of US$11.15 per share cash would value the company at about C$2.6 billion.

Mitel chief executive Rich McBee said in an interview Tuesday that Searchlight would leave the company intact and support it through a period of transition from one business model to another.

“We’ll continue to operate with the same team, the same strategy, the same places and the same portfolio (of products),” McBee said. “So it’s good for the employees, it’s good for our customers.”

It’s also good for investors, he said, since they’re being offered an above-market price that accelerates their return on investment.

The transaction is subject to conditions, including a 45-day period when Mitel can look for a higher bid.

Mitel’s board of directors will recommend shareholders approve the deal. More details will be released in a circular ahead of a Mitel shareholder vote.

Searchlight is a private investment firm with investments in North America and Europe. It declined to comment Tuesday.