Comtech Shares Soar On Acacia Acquisition Proposal At 39% Premium

  • Private equity and hedge fund veteran Clifford Press led Acacia Research Corp ACTG proposed to acquire Comtech Telecommunications Corp CMTL for $790 million in cash Reuters reports.
  • Activist hedge fund Starboard Value-backed Acacia offered $30 per share in cash for Outerbridge Capital Management LLC, implying a 39% premium to Comtech's closing share price on October 29.
  • Acacia Research seeks to acquire undervalued businesses with a primary focus on mature technology, life sciences, industrial, and specific financial services segments. Comtech is a provider of advanced communications solutions.
  • In October, Comtech sold a $100 million stake through a PIPE deal to hedge funds Magnetar Capital LLC and White Hat Capital Partners LP, angering Outerbridge Capital Management. Outerbridge said the stake sale lacked premium and was expensive and dilutive to Comtech shareholders.
  • Outerbridge criticized Comtech's initiative to appoint its COO Michael Porcelain as the CEO, holding Porcelain responsible for Comtech's poor stock performance. 
  • Outerbridge challenged Comtech by nominating three directors to the company's five-member board. 
  • Price Action: CMTL shares traded higher by 25.50% at $27.09 in the market session on the last check Monday.
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