Ceragon Networks Ltd (NASDAQ: CRNT) shares jumped 15% after Aviat Networks Inc (NASDAQ: AVNW) announced the submission of a non-binding agreement to purchase all Ceragon’s outstanding shares currently not held in a cash transaction at $2.8 per share. As a result, as of June 24, 2022, Aviat held around 5% of Ceragon’s shares outstanding, making the wireless transport solutions leader the third-largest stockholder.
Aviat took its proposal to shareholders after delays from the Board of directors
Aviat CEO and President Peter Smith stated:
Over the past year, we have sought to engage on numerous occasions with Ceragon’s Board and management team to negotiate terms for a transaction that we are confident would deliver meaningful near- and long-term value for shareholders of both companies.
Shareholders of Ceragon would get $2.8 in cash per share under the provisions of the offer, which was presented to the company’s Board of directors, giving them instant and assured value. To give shareholders the chance to benefit from the merged company’s tremendous potential, Aviat is still open to the idea of providing a part of the payment in the form of Aviat shares.
Smith added:
We have twice attempted to reasonably address concerns voiced by Ceragon, and have met only with delay and rejection. Along with Aviat’s Chairman, I traveled to Israel last week to meet in person with Ceragon’s Chairman, CEO, and a member of its Board. They refused to engage with us in constructive discussions, instead making further demands for unorthodox and off-market provisions that seem intended only to delay, leaving us with no other option but to make Ceragon shareholders aware of our proposal.
The proposed price represents a 34% premium on the last closing price of Cergon shares
The proposed price is significantly above the closing rate of Ceragon shares on June 27, 2022, by 34% and the 60-day volume-weighted average daily trading rate of Ceragon stock as of June 24, 2022, by 51%.
John Mutch, The Chairman of Aviat, stated:
Our Board of Directors has spent considerable time analyzing the benefits of this combination and is unanimous in its belief that such a transaction has clear strategic and financial merits and creates a compelling opportunity to deliver meaningful near-and long-term value.
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