Polycom Surges 8% Following Bloomberg Report Company Is An Acquisition Target

Shares of Polycom Inc (NASDAQ: PLCM) surged higher by more than 8 percent Wednesday morning following a Bloomberg report the company is an acquisition target.

According to Bloomberg's sources, Mitel Networks Corp (NASDAQ: MITL) is in advanced merger talks with Polycom in a deal that could value the company at around $1.7 billion, or around $12.50 per share.

Shares of Polycom closed for trading at $10.84 on Tuesday.

Activist investor Elliott Management holds a $100 million stake in both companies and have urged them to merge amid competitive pressure from larger peers such as Huawei Technology.

Related Link: UPDATE: Elliott Mgmt Sends Letter to Polycom Board Urging Tie-Up with Mitel Networks

The activist investor delivered a letter to Polycom's Board of Directors back in October, 2015 and argued "an industry consolidation strategy should be evaluated and is likely the best path forward."

"Mitel has a very capable management team led by CEO Rich McBee and CFO Steve Spooner, has engaged in successful M&A and offers valuable tax benefits to a new combined company," Elliott Management added in its letter. "We believe that the ideal Consolidation Strategy begins with a Polycom/Mitel combination, whether those companies stay public or go private."

Shares of Mitel were trading higher by 2.2 percent after Wednesday's market open.