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Israeli network equipment vendor Ceragon Networks has criticized Aviat Networks’ proxy contest for board seats but said it was still open to a transaction between the two companies, despite what it called Aviat’s “disingenuous behavior”.
A month ago, Texas-based wireless technology company Aviat kicked off a campaign to overhaul Ceragon’s board after seeing at least two takeover offers rejected by the Israeli company, the latest valued at $2.80 per share. The activist insisted it was focused on getting a friendly deal done.
However, Ceragon said on Monday that Aviat did not act in good faith in the months leading up to the proxy contest. Ceragon accused Aviat of preparing the attack well before engaging in sale negotiation, which happened at the end of June.
“Absent a significantly improved value and deal certainty, we can only continue to believe that Aviat is principally interested in publicly disparaging Ceragon and disrupting and damaging our business, and that your ultimate goal is to take control of our board in order to damage a competitor or to avoid a good faith negotiation for a fair transaction,” said Ceragon Monday.
The proxy target also argued a victory for Aviat would be detrimental to its shareholders as the activist would likely then push for a deal at a depressed price. Ceragon’s biggest shareholder, Joseph Samberg, is also of the opinion that Aviat’s $2.80 per share proposal is too low.
Still, Ceragon said it was willing to consider a combination with Aviat, provided this is “fairly valued” and “fully financed”. Ceragon questioned Aviat’s ability to pay a “fair” price to its shareholders and said the current market environment is not conducive to a leveraged takeover. Central banks around the world are tightening monetary conditions to tame inflation, which is hovering at four-decade highs in the U.S. and other developed countries.