ECI Telecom, an Israeli telecom equipment manufacturer, confirmed media reports Sunday that it is in talks with a group of investors led by Swarth Investments, to be wholly acquired for $10 per share in cash. A definitive agreement has not been reached and until one has, or unless the talks are terminated, ECI said it will not comment further on the matter. Shares of ECI Telecom rose 3.8% to $8.92 in normal trading Friday. With 121 million fully diluted shares outstanding, a $10 per share acquisition values it at $1.21b. Reuters reports an RBC Capital Markets analyst said he believed $10/share was a "fair price," adding that he "doesn't think there will be a competing bid, given the tepid business momentum and lack of strategic differentiation regarding its pipeline." ECI is 28% owned by Tel Aviv-based holding company Koor Industries, which says it stands to profit approximately $143.2m based on the $10/share price. ECI owns a 23% stake in Veraz Networks, per its Q1 earnings release.
Sources: Press release, Bloomberg, MarketWatch, Reuters
Commentary: ECI Telecom: Wait on the Sidelines • ECI: Israel’s Technological Flagship • Veraz Networks Inc. IPO
Stocks/ETFs to watch: ECI Telecom Ltd. (ECIL), Koor Industries Ltd. (OTC:KORIY), Veraz Networks, Inc. (VRAZ)
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