Avaya Holdings soars on report it is weighing $5B buyout offer

Shares of Avaya Holdings Corp (NYSE:AVYA) rocketed in pre-market trade Monday in the wake of a Reuters report that says the telecom company and software vendor is weighing a leveraged buyout offer from an undisclosed private equity firm that values it at more than $5 billion, including debt.

Sources told Reuters that Avaya’s board is now considering an offer from a private equity firm that values it at more than $20 per share.

Investors applauded the news, sending Avaya shares up nearly 32% to $17.43 before the opening bell Monday.

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The buyout offer comes on the heels of Avaya emerging from bankruptcy protection 15 months ago. The Santa Clara, California company debuted as a public company after being spun-off from Lucent Technologies in 2000 and was taken private seven years later when it was bought by the private equity firms Silver Lake Partners LP and TPG Capital LP for $8.2 billion.

A specialist in telephony systems, Avaya has drawn considerable interest from private equity firms looking to buy it out over the last few months, Reuters sources said, and there is “no certainty the latest offer will result in a deal”.

Avaya shares closed at $13.21 on Friday, providing it with a market cap of $1.5 billion. The telecom company also had $3.2 billion in debt as of the close of last year, according to Reuters.

Contact Ellen Kelleher at [email protected]

Story by ProactiveInvestors