Polycom's Stock Jumps After Mitel's $2 Billion Buyout Bid

Shares of Polycom Inc. soared 8.8% in premarket trade Friday, after the business communications company agreed to be acquired by Mitel Networks Corp. in a cash and stock deal valued at $1.96 billion. Under terms of the deal, Polycom shareholders will receive $3.12 in cash and 1.31 Mitel shares for each Polycom share they own. Based on Thursday's closing prices, the bid values Polycom shares at $13.44 each, or a 9.5% premium. On Thursday, Polycom's market capitalization was $1.64 billion, while Mitel's was $951.9 million. Mitel expects the deal, which is expected to close in the third quarter, to add to earnings in 2017. After closing, the combined company will be based in Ottawa, Canada. Elliott Management, which owns 6.6% of Polycom's outstanding shares and 9.7% of Mitel's stock, said it supported the deal. Polycom's stock has dropped 2.5% year to date, while Mitel's stock has gained 2.5% and the S&P 500 has advanced 1.9%.