Inter-Tel is informing that the company has received a letter from former CEO Steven Mihaylo proposing a “recapitalization plan” for the company.

 

In the letter, Mihaylo is urging Inter-Tel stockholders to vote against the Mitel Networks Corporation buyout offer and outlining a plan to recapitalize the Company, which could provide “significantly” greater value to stockholders than the current buyout proposal.

 

Inter-Tel’s Special Committee of the Board of Directors will meet to consider the Mihaylo recapitalization proposal in accordance with their fiduciary duties and the provisions of the Mitel Merger Agreement.

 

In an interview with the Ottawa Citizen, Mihaylo said that he is building a war chest of almost $500 million U.S. inside and outside the company to finance a bid of $28 U.S. per share for Inter-Tel.

 

“I am very serious. I have spent $5 million of my own money already on this bid,” Mr. Mihaylo told the Citizen.

 

In his letter to shareholders, Mihaylo also stated that he is not opposed to the sale of the company. “If Mitel or another bidder offers what I believe is a fair price I will gladly support it,” he said. “However, in the absence of that offer, I believe the Company has a better alternative through a leveraged recapitalization, which I firmly believe will provide greater present value to all shareholders and will at the same time preserve the opportunity for future growth and upside potential, including a sale at a later date.”

 

One effect of this action is that Vector Capital Corporation has decided not to pursue an offer to acquire Inter-Tel. As reported on this blog several weeks ago, Vector Capital expressed an interest in acquiring Inter-Tel for $26.50 per share in cash.

 

As they say in the movies, “the plot thickens.”