Avaya agrees £4.1bn bid with equity firms

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Two private equity firms have agreed to buy out telecoms equipment firm Avaya in a $8.2bn (£4.1bn) deal.

TPG Capital and Silver Lake made the bid which would see Avaya pay up to $250m (£125m) should it pull out of the deal, although analysts believe this is unlikely to happen as counterbids are unlikely to be made.

The deal is expected to be completed by this autumn, subject to approval by shareholders and regulators. According to a filing made to the US Securities and Exchange Commission, Avaya would have to pay $250m to the private equity companies if it backs out of the deal after 50 days.

News reports have previously linked Avaya with Nortel as a possible suitor and Avaya's size has made it subject of takeover speculation. Last month, the company cancelled an investor conference which sparked rumours of a possible takeover.

The private equity firms have agreed to pay $17.50 for each Avaya share, which is a 28 per cent premium on its closing share price on 25 May.

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