Aviat calls for extraordinary general meeting to buy Ceragon for $235M

Wireless transport company Aviat Networks wants to purchase the wireless backhaul company Ceragon Networks, and it's taking its proposal directly to Ceragon shareholders. Aviat is offering to pay $2.80 per share for all the outstanding shares of Ceragon that Aviat does not already own. Aviat holds more than 5% of Ceragon's outstanding shares as of June 24, 2022, making it Ceragon's third largest shareholder. The deal would pay Ceragon shareholders more than $235 million in cash. Ceragon’s stock jumped 23% in after-hours trading today.

Both of these companies have won contracts with Dish Wireless. In February 2021, Dish named Aviat as one of its key suppliers for microwave transport for midhaul and backhaul in its 5G network.

And just last month, Ceragon said it had struck an agreement with Dish Wireless to provide ultra-high capacity IP-50C microwave and IP-50E millimeter wave transport solutions.

Today, Aviat has call for an extraordinary general meeting of Ceragon’s shareholders for the purpose of increasing the size of the Ceragon board, removing three of Ceragon's current directors and electing independent board members.

"Over the past year, we have sought to engage on numerous occasions with Ceragon's Board and management team to negotiate terms for a transaction that we are confident would deliver meaningful near- and long-term value for shareholders of both companies," said Aviat President and CEO Peter Smith, in a statement. 

He said Aviat executives have twice attempted to address concerns voiced by Ceragon, and they have been met with delay and rejection. Smith and Aviat's Chairman John Mutch traveled to Israel last week to meet in person with Ceragon's CEO Doron Arazi, along with Ceragon’s chairman and another member of its board. “They refused to engage with us in constructive discussions, instead making further demands for unorthodox and off-market provisions that seem intended only to delay, leaving us with no other option but to make Ceragon shareholders aware of our proposal,” said Smith.

He added, “Although we very much prefer to negotiate a transaction with Ceragon on a friendly basis, we are prepared to take all steps necessary to pursue this transaction."

Aviat says its proposal represents a premium of 34% to the closing price of Ceragon shares on June 27, 2022, and a 51% premium to the 60-day volume weighted average trading price of Ceragon shares as of June 24, 2022.

On November 21, 2021, Ceragon rejected Aviat’s initial proposal to acquire Ceragon for $3.25 per share in cash.

In a letter sent today to Ceragon’s leadership, Aviat said, “Ceragon's customer base and geographic exposure is highly complementary to Aviat's. Together, we can deliver a valuable set of technological expertise and product breadth to customers around the world.”