ECI Telecom Acknowledges Buyout Talks at $10/Share

| About: ECI Telecom (ECIL)

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. ECI-Telecom-ECIL-chart-06-15-07 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 SidelinesECI: Israel’s Technological FlagshipVeraz Networks Inc. IPO
Stocks/ETFs to watch: ECI Telecom Ltd. (ECIL), Koor Industries Ltd. (OTC:KORIY), Veraz Networks, Inc. (VRAZ)

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