Ceragon Networks Ltd. (NASDAQ: CRNT) (the “Company”, “Ceragon”, “we”, “us”, or “our”), issued the following statement with reference to a report issued by Egan-Jones Proxy Services (“Egan-Jones”) in connection with the Extraordinary General Meeting (EGM) scheduled to be held on August 23, 2022.
We are pleased that Egan-Jones believes that “voting AGAINST this proposal is in the best interest of the Company and its shareholders” and has joined Institutional Shareholder Services Inc. (“ISS”) in recommending that shareholders vote AGAINST all of Aviat’s nominees.
In reaching this conclusion, Egan-Jones cited the following factors regarding Aviat’s inadequate indication of interest1:
- “We strongly believe that Aviat’s revised indication of interest still significantly undervalues [Ceragon] and is a low ball offer, given that its implied multiples are below precedent transaction and public company trading multiples, and is well [below] research analyst price target[s]”
- “….given the current market environment, we are also doubtful [of] Aviat’s ability to obtain committed financing as it failed to provide evidence of securing such”
Moreover, Egan-Jones’ report highlighted that Ceragon’s Board is far superior to Aviat’s hand-picked nominees to protect the interests of Ceragon’s shareholders, saying:
- “Contrary to Aviat’s nominees, we believe that Ceragon’s incumbent Board continues to possess the best in class qualifications and expertise in the telecom industry, public board experience, and M&A transactions for value creation”
Egan-Jones concludes that: “After evaluating the provisions and tenets of [Aviat’s] proposal, we determined that the proposed resolution is NOT in the best interests of the Company and its shareholders. We recommend a vote AGAINST this Proposal.”
Two out of the three proxy advisory firms raised significant concerns regarding Aviat’s low-ball, highly conditional indication of interest and recommended that shareholders vote AGAINST all of Aviat’s nominees. With respect to Glass Lewis’ report, we respectfully disagree with their conclusions, which we believe did not properly take into account (i) the low-ball value of Aviat’s indication as determined by multiple proxy advisors, research analyst price targets, and many of our top shareholders, (ii) the lack of financing certainty in Aviat’s indication, (iii) our record of engagement with Aviat, (iv) and the lack of telecom and appropriate board experience among Aviat’s hand-picked nominees.
The Ceragon Board and leadership team are focused on doing what is right for Ceragon, our shareholders and our customers. As we have said, our Board has been open to exploring a potential combination with Aviat that delivers full, fair, and certain value to Ceragon shareholders. However, we will not enter into a sale transaction at an inadequate price or with a high degree of uncertainty. As ISS puts it, “It is in shareholders’ best interests to encourage a hostile acquirer to submit an offer that is subject to as little conditionality as possible and is at an initial value sufficient to “earn” a seat at the negotiating table.”
Ceragon urges shareholders to vote “AGAINST” all proposals on the WHITE proxy card to prevent Aviat’s attempt to take control of the Ceragon Board.
Ceragon reminds shareholders that every vote is important. Shareholders are urged to discard any GOLD proxy materials and only to vote AGAINST all proposals using the WHITE proxy card.
If you have any questions or require any assistance with voting your shares, please contact the Company’s proxy solicitor, Morrow Sodali LLC at 800-662-5200 (toll-free in North America) or +1 203-658-9400 or email at CRNT@info.morrowsodali.com.
Evercore is serving as financial advisor and Shibolet & Co. and Latham & Watkins LLP are serving as legal advisors to Ceragon.
