Ceragon Networks jumps 23% as Aviat offers to buy rest in $235M deal

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• Ceragon Networks (NASDAQ:CRNT) has jumped 23% after hours following a filing from Aviat Networks (NASDAQ:AVNW) where Aviat offered to buy the remaining shares it doesn't own for $2.80 each in cash.
• That means a deal of about $235M, with an implied enterprise value of $258M.
• "Ceragon shareholders deserve better," Aviat says in its filing, adding "Ceragon's existing strategy is destroying shareholder value and presents significant execution risk going forward."
• The $2.80/share price marks a 51% premium to 60-day volume-weighted average price, Aviat says, and 48% premium to the 90-day VWAP. Ceragon closed Monday at $2.09 per share.

Comments

[Xxfactor]

Idk why aviat wants it. I heard it was expensive low margin and high risk?

[Henrik Alex]

@Xxfactor

CRNT, while struggling with both growth and margins remains a key competitor.

[NoDOze101]

@Henrik Alex - BOTH are due to supply chain issues; its not a CRNT specific issue as they stated their Q1 sales would have been about 10% higher if the supply chain was normal.

[Henrik Alex]

@NoDOze101

Sure, but this doesn't really amounts to impressive growth either.

[Sean0321]

Looking at the stock price performance and the huge volume, I start to worry, I don't know who is buying, I hope it's not AVNW. And I won't sell my shares at just $2.8, no way I accept the offer.

[Xxfactor]

@Sean0321 It's not up to you

[Jeff Boyd]

@Sean0321 Dissenting from a buyout offer is usually an option although given that it is an Israeli company it would be tough.

[i concur]

Does anyone think ran, cfo, leaving was just coincidence

[Jeff Boyd]

@i concur New CEO is a former CFO. Tough to be CFO in that environment. He wants his own person.

[i concur]

What's ceragons options here? What are the realistic plays other than going to a vote and letting the majority decide?

1 another offer
2 Nother big investor comes forward
3...?

[Henrik Alex]

@i concur

Simply rejecting the offer and keeping their existing directors on the board.

[binartech]

@Henrik Alex the only thing is that chairman is not major holder just like 8% , major holder is Samber with 15%. Anyway Samberg is not going to sell for 2.8

[i concur]

@binartech my prediction is Samberg is ready t9 sell his shares to a big player

[allroundr]

Steady the ship…
It is standard with any exit from a wormhole that there will be other accompanying projectiles. Increase deflector intensity to level 8. Wait for the uncloaking process to expose the hostile take-overer.
Then strike!

[Xxfactor]

@allroundr What???

[binartech]

Also aviat discloses owning 4.23 MMs shares !

[kkthxbye]

@binartech there is no way ceragon people dont sell...
Take the money, buy meta shares and do x3 in 3y...

[binartech]

@kkthxbye they are not going to sell ! simple and clear. not at 2.80 or 3 or 4 or 5. You have a big holder, that own 15% of the company which is not on the board, but will use his voting power, and this guy is not going to take 2.8 or even 5. This with the chairman hown like 25% of the company, and aside of AVNW there is no single holder with 5% or more !

[Henrik Alex]

@binartech

I do not expect a deal to happen either albeit it would be about time for Ceragon to admit to ongoing failure and become part of a larger company with (hopefully) better execution.

Ceragon has been a serious disappointer for most of the past 2 decades and I do not expect this pattern to change going forward.

[binartech]

At the en d they released a statement, saying they are analyzing what they are going to do ..... I hpe they are calling NEC, saying hurry, make a goood offer jajaja.... At least will see if this wakes up IR from their endless sleep !

[ptusr]

There is a good chance of AVNW buying open share on the market to up there overall stake. AVNW owns 5% of CRNT....this is going to be like TWTR grind down.

AVNW is not walking away and the price offer might increase maybe another 10%.

[Henrik Alex]

@ptusr

No way. They can't afford buying more shares without a financing commitment. They acquired the 5% stake to get the right to call for a special shareholder meeting.

Aviat can't do anything if CRNT shareholders don't remove the incumbent directors and I do not expect this to be the case.

[ptusr]

@Henrik Alex if your correct...AVNW could dump the stock and drive the price down? IMO....more to this story.

All AVNW needs is another party to join in on their side. CRNT is in a defensive mode. AVNW stock is up 8% today. That is telling for a buyer to up on a takeover attempt.

[HKTZ]

@ptusr l00ks like the market is viewing he potential purchase very positively......CRNT is worth more than the offer.....hold on

[HKTZ]

next stop..........3.77

[kkthxbye]

I would have expected a bigger after market reaction... how come this stock is still under 2.80 now...

[Henrik Alex]

@kkthxbye

Because the deal is unlikely to go through. Ceragon management has apparently refused to engage with AVNW and this is not likely to change after Aviat management decided to make its offer public.

[kkthxbye]

@Henrik Alex exactly
That means 2.80 bare minimum right ?

[Henrik Alex]

@kkthxbye

This means CRNT is likely to stay independent and remain the very same underperformer it has been for most of its life as a public company.

[stesla60]

I don't really blame Aviat for the initial low-ball offer since bidding has to start somewhere similar to auctions in which the final selling price is virtually always higher.

"Ceragon shareholders deserve better," Aviat says in its filing..."

The said statement really is very rich with the very low $2.80 offer? Yes, shareholders deserve better like at least offering a 52 week high of $4.33 + an added premium.

"Aviat's next generation System on Chip (partnership with MaxLinear) is based on a newer generation of technology than Ceragon's chip and we believe will offer significant differentiation. Ceragon's chip development strategy is destroying value to shareholders and will offer no technological advantage to customers in the medium to long-term. Without our offer for and stewardship of Ceragon's business, we do not expect to see significant change in the company's stock performance nor its operating results"

It's very interesting that Aviat threw in a passage about Aviat & MaxLinear? In essence they proclaim they have a much better technological solution than CRNT. If they do, why bother with a buyout? With Dish selecting CRNT, it's very apparent Aviat couldn't convince Dish that they do have a better solution that has been thoroughly tested, evaluated, and ready to go.

[sbandara]

Excellent timing by Aviat.

[Sean0321]

Don’t let AVNW steal CRNT at cheap valuation, no way.

[i concur]

Avnw clearly trying to steal crnt

[binartech]

Avnw knows he is a walking dead technologically speaking.

[Jeff Boyd]

@binartech Well they did say they have SOC.

www.maxlinear.com/...

Where they are in development I don't know as PR was not clear.

[binartech]

@Jeff Boyd they announce the development..... "announced the next-generation MODEM development " ... years.... unless they just make a new chip with mmWave and MW in single chip... nothing impressive.... not launched but eight core MW ... that's what the market needs....
Or they asked MAxlinear a little help to make ceragon think on selling.....

[NoDOze101]

@Jeff Boyd sounds exactly like the long worded VAPORWARE announcements that INTEL puts out when they KNOW they are behind the curve .. tries to convince potential customers to wait a bit longer before making a decision in the HOPES it will buy them enough time to catch up. .. wait because we have something better coming ... oldest, overplayed trick in the book

[Sean0321]

$2.8 way too low, will reject.

[binartech]

IMHO just making noise.... some noise is good jajaja. And may be some other wil stand up and try to buy at a reasonable price. Joseph Samberg owns 15% of the company... will start to activate its position and for sure will reject this insult.
It will be good to shake management and IR.... to wake them up.
May be now they understand that company can't be kept at this low values....
Ceragon development is way more valuable than 2.8 / share.

[testfd]

@binartech
been a poor performer for years....if the offer get rejected will it fall or go up?

[binartech]

@testfd probably fall, said that , this may wake up a big guy like NEC, that suddenly they can lose access to new chipset
Interesting day tomorrow.
At least this will wake up crnt IR....

[testfd]

@binartech
crnt ir has not been awake for years....i doubt this gets accepted.........

[ptusr]

About time...this company management needs help.

This will be decided by CRNT largest individual shareholder.

[Sane Man]

This company can never get out of its own way. Good riddance !

[jdberwanger]

The cycle is just starting. To sell out now for peanuts would be a disaster. Take a look at the long term chart where it topped out. I’ve been an owner for almost 10 years but by no means would I vote my shares in favor when 5G is in the 2nd or 3rd inning.

[testfd]

@jdberwanger

10 years and look where the stock is

[jdberwanger]

@testfd Not happy with the return but more importantly is the expected return over the next 2 to 3 years.