The back and forth between Mitel Networks (MITL) and ShoreTel (SHOR) continues, as ShoreTel’s Board of Directors has unanimously rejected Mitel’s most recent bid to acquire the Sunnyvale, California-based unified communications (UC) company for $540 million.

ShoreTel’s board concluded Mitel’s proposal “significantly undervalues ShoreTel and its strong prospects for continued growth and value creation.”

“After careful evaluation, ShoreTel’s Board of Directors has determined that Mitel’s proposal significantly undervalues ShoreTel and fails to reflect the upside of ShoreTel’s growth initiatives and technology developments,” Chuck Kissner, chair of ShoreTel’s board, said in a prepared statement. “We believe Mitel’s proposal is financially inadequate, is an opportunistic attempt to acquire ShoreTel’s assets and is not in the best interests of ShoreTel stockholders.”

Richard McBee, Mitel’s CEO, last week said his company had submitted a proposal to acquire ShoreTel for $540 million, which represents a 24 percent premium to ShoreTel’s closing stock price on Oct. 17 and a 30 percent premium to ShoreTel’s enterprise value.

ShoreTel, however, has cited the following reasons for rejecting Mitel’s most recent bid:

“Mitel’s opportunistic offer attempts to acquire ShoreTel just before its most significant new product launch, while ShoreTel’s business is transforming from a model largely based on one-time product and software sales to a recurring revenue model driven by its growing hosted services business, and only shortly after it has expanded its channel partner program to target growth in cloud-based solutions,” Kissner added.

Click here for Talkin’ Cloud’s Top 100 CSP list

A Mitel spokesperson earlier today declined comment to Talkin’ Cloud about the ShoreTel board’s rejection of Mitel’s most recent proposal.

Mitel targets market growth

The demand for cloud communications is rapidly increasing, and Mitel has taken several steps to capitalize on this growing market.

In addition to its $540 million bid for ShoreTel, Mitel recently rebranded and is focused on global expansion.

“Over the next 18 months, we are focused on further momentum and growth. Cloud communications continue to be a strategic area of focus, and we offer the best path to the cloud. We are helping customers migrate at their pace to private, public and hybrid cloud communications,” a Mitel spokesperson told Talkin’ Cloud earlier this month. “The contact center is another growth area for Mitel. You’ll see more momentum here over the next 18 months, and we’ll continue to grow globally.”

Share your thoughts about this story in the Comments section below, via Twitter @dkobialka or email me at [email protected].