NEW YORK (TheStreet) -- Shares of Polycom (PLCM) are soaring 13.11% to $12.30 on heavy trading volume early Friday morning after terminating its planned merger with Mitel Networks (MITL) in favor of a $2 billion bid from private equity firm Siris Capital Group.
Mitel stock is spiking 18.60% to $7.14, also on heavy trading volume.
Siris offered $12.50 per share in cash to purchase the San Jose, CA-based video-conferencing company. Including Polycom's outstanding debt, this represents a 14% premium to Mitel's closing price on July 7, Bloomberg reports.
Mitel had agreed in April to purchase Polycom in a cash and stock deal valued at roughly $1.96 billion, but Siris made a competing offer a month later that valued the transaction at $14.50 per share, according to Bloomberg.
Today's merger agreement is contingent on Polycom ending its existing agreement with Mitel and paying a $60 million termination fee.
Polycom expects the Siris deal to close in the third quarter.
Already today, 42.43 million shares of Polycom have been traded vs. its average trading volume of roughly 1.07 million shares per day.
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C+.
Polycom's strengths such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and disappointing return on equity.
You can view the full analysis from the report here: PLCM
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.