UPDATE In the latest salvo in the battle for control of Ceragon Networks Ltd., the wireless backhaul and fronthaul OEM’s Board of Directors has advised its shareholders to reject the unsolicited takeover bid by Aviat Networks, Inc., also a maker of wireless transport. The Board rejected Aviat’s latest bid shortly after it increased its offer from $2.80 up to $3.08 a share. In a letter to investors, the Board said the bid “significantly undervalued” the company and is “not in the best interests” of Ceragon shareholders.
Ceragon’s Board indicated that it is open to being acquired if the price is right. However, Aviat’s offer undervalues the company, according to the Board, by implying multiples that are below precedent transaction and public company trading multiples, and research analyst price targets. Continue Reading
“[The bid] also does not take into account the company’s strong business momentum, as reflected in our growing backlog, market share gains and gross margin enhancement,” the Board wrote. “We are excited about the progress we are making and our outlook for the future. With the strength of our core business, combined with our new growth initiatives and supply chain normalization, we expect to drive revenue of $325–345 million in the full year 2023, and are targeting revenue of approximately $500 million and gross margins of at least 34–36 percent within the next five years.
On June 27, Aviat proposed to acquire Ceragon, saying the combination of the two companies would create a leading global wireless transport concern that would be more efficient and competitive. Additionally, the overlap of the company’s portfolio would lead to $35 million in cost synergies.
On July 18, Ceragon accused Aviat of attempting to replace its current directors with “unqualified, hand-picked” nominees to take control of the Board and negotiate the takeover bid. On August 2, Aviat increased its bid to include $2.80 per share in cash and $0.28 in equity consideration of Aviat stock, providing a premium of 47 percent to the closing price of Ceragon shares on June 27, 2022.
By J. Sharpe Smith, Inside Towers Technology Editor
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