US telecom firm sold for $8.5bn

Telecoms equipment-maker Avaya has accepted an $8.5bn (£4.3bn) takeover offer from private equity groups Silver Lake and TPG Capital.

The two are paying $17.50 a share, which represents a 28% premium over Avaya's stock price before speculation of a deal first surfaced on 29 May.

Spun out from Lucent in 2000, US-based Avaya is the world's biggest maker of business phone network equipment.

According to reports, Canadian group Nortel was also interested in Avaya.

"After an extensive review of Avaya's strategic alternatives with Avaya management and our financial advisers, the board of directors of Avaya determined that this transaction with Silver Lake and TPG provides the best value for Avaya's shareholders," said Avaya's chairman Phil Odeen.

The deal is the second multi-billion takeover in the US telecom sector involving TPG Capital in a fortnight.

At the end of last month, TPG joined with Goldman Sachs to buy mobile phone network Alltel for $27.5bn.

(Published by BBC, June 05, 2007)