Ceragon continues to dodge Aviat’s overtures

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Wi-fi transport firm Ceragon continues to aim to keep away from the acquisition attentions of competitor Aviat Networks, saying that Aviat’s gives don’t correctly worth Ceragon.

Aviat has elevated its provide consisting of $2.80 in money and $0.28 in fairness consideration, from an earlier provide of $2.80 per share (the corporate says it has additionally beforehand supplied $3.25 a share throughout its ongoing efforts to accumulate Ceragon over the previous yr). As Ceragon continued to reject Aviat’s gives, the latter firm finally made its intent public and even arrange an internet site making its case to shareholders, and the 2 corporations have been releasing dueling statements and shareholder letters on the state of affairs.

Aviat already owns greater than 5% of the corporate and says that it’s Ceragon’s third-largest shareholder. It’s trying to take over Ceragon’s board with a slate of its personal nominees, which Ceragon says violates the corporate’s articles of affiliation.

In a letter to shareholders this week, Ceragon described Aviat’s provide of $3.08 per share as an “low-ball, extremely conditional bid” from a competitor that “considerably [undervalues] the Firm and isn’t in the most effective pursuits of Ceragon shareholders.”

To be clear, Ceragon is targeted on maximizing worth for all shareholders and we stay open to exploring a transaction with Aviat or anybody else, however provided that such mixture delivers full, truthful and sure worth to Ceragon shareholders,” mentioned Ceragon within the letter (underlining theirs). “We’ve met with Aviat a number of instances (together with with administrators from our respective boards) to discover a transaction. Nevertheless, Aviat’s [revised offer] continues to fall far quick.”

Ceragon pointed to its latest second-quarter outcomes as proof that it has important momentum and a better worth than Aviat is providing, and claims it has 25% market share. It mentioned that it has $39 million in bookings in North America, which it known as “Aviat’s yard” and that North America is now tied with India as Ceragon’s largest market.

As well as, Ceragon’s letter accused Aviat of getting “a observe document of abandoning late-stage negotiations.” The letter continues: “On a number of events, together with with Ceragon in addition to one other firm with which our administrators are concerned, Aviat deserted negotiations after the businesses had exchanged confidential and delicate data and had drafted a near-final settlement.”

Aviat responded with a letter of its personal to “right the most recent false claims and mischaracterizations”, together with disputing Ceragon’s characterization of its outcomes. Aviat President and CEO Peter Smith has known as Ceragon’s quarterly outcomes “disappointing” and within the newest assertion, Aviat notes that Ceragon “lowered its annual steering within the first quarter of 2022” and missed analysts’ consensus expectations, in addition to having adverse free money movement for half a dozen quarters. “The reality is that Ceragon is struggling by itself, and isn’t going to realize outlandish worth targets, and even its personal projections,” Aviat mentioned (bolding theirs). “We proceed to consider that Ceragon would see super benefits from being half of a bigger platform with extra scale and sources as a part of Aviat.” Smith himself has additionally mentioned that Aviat stays “dedicated to consummating a transaction with Ceragon and taking all the mandatory steps to make that occur.”

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