Troubled Xpedite Systems Inc, which declined a $200m management buyout offer in July (CI No 3,207) confirmed that it has indeed received a merger proposal from telecommunications services provider Premiere Technologies (CI No 3,283). Premiere has come forward with a proposal to acquire fax and electronic messaging company Xpedite in stock-for-stock transaction that would be accounted for as a tax-free pooling of interests. The terms of the offer provide for shares of Xpedite common stock to be converted into $30 worth of Premiere’s common shares, with the ratio based on the average closing price of Premiere shares prior to the closing of the deal. The $30 value placed on Xpedite stock is currently a premium of $2.50 over Wednesday’s closing price of $27.50, which represents a $2.375 – or 9.5% – jump for the day. The management offer for Xpedite was for $22.50 per share, valuing the Eatontown, New Jersey company at $202.5m. Xpedite’s board is currently mulling over the offer and will not predict whether a definitive merger agreement will indeed be reached. The deal is contingent upon Xpedite’s completion of the pending acquisition of Xpedite Systems Ltd in the UK. Another hitch in the proposed deal is the matter of whether Premiere’s shareholders will vote in favor of the issuance of additional stock to cover the acquisition. Premiere shares closed on Wednesday at $33.75, down $0.625 on the day.
XPEDITE CONFIRMS RECEIPT OF MERGER PROPOSAL
