Investment firm Marlin Equity Partners has announced plans to take over US network equipment vendor Tellabs for US$891m in cash.
The deal gives an affiliate of Marlin until 1 November to launch a tender offer to buy all of Tellabs’ outstanding shares…
Investment firm Marlin Equity Partners has announced plans to take over US network equipment vendor Tellabs for US$891m in cash.
The deal gives an affiliate of Marlin until 1 November to launch a tender offer to buy all of Tellabs’ outstanding shares at US$2.45 each, representing a 4.3% premium over the stock’s closing price on Friday.
The vendor’s board has already given its nod to the deal, as has Michael Birck, its co-founder and second-largest stockholder.
Tellabs chairman Vince Tobkin said: “Tellabs’ board of directors arrived at the decision to enter into a transaction with Marlin after a thorough review of Tellabs’ strategic alternatives and after more than 30 potential buyers, both strategic parties and financial sponsors, were contacted as part of a competitive bidding process.”
Third Avenue Management was the group’s largest shareholder as of 30 June 2013, holding a stake of around 10%.
Goldman Sachs is financially advising Tellabs with Sidley Austin providing legal advice.
Marlin hired Credit Suisse and Evercore to advise it on financial matters, with Schulte Roth & Zabel acting as legal counsel.
In mid-July Tellabs appointed its third CFO of 2013 by bringing in Larry Rieger to replace Tom Minichiello, who resigned after acting in the position.
Its last permanent CFO, Andrew Szafran, left the role in May citing personal reasons.
Shareholder rights firm investigates deal
Meanwhile, law firm Tripp Levy announced it has been hired by Tellabs’ shareholders to investigate the acquisition.
In a statement on 21 October, the law firm said: “The investigation concerns whether the senior management and board of directors of Tellabs breached their fiduciary duties to shareholders by selling the company for an unfair price through an unfair process.
“Indeed, the book value alone of the company is worth US$2.81 per share, the stock has traded over US$3.60 per share within the past year and analysts have projected the stock to be worth more than the offer price (US$2.50 per share).”
The group added that the offer is “well below” multiples seen in comparable deals in the industry recently.
