Video conferencing equipment maker Polycom Inc said it agreed to be bought by a private equity firm for about US$1.7 billion, scrapping a three-month old deal with Canada's Mitel Networks Corp.

The PE firm, Siris Capital Group, offered US$12.50 per share in cash for Polycom, representing a premium of 15 per cent to Polycom's Thursday close.

Polycom's shares rose about 13.6 per cent to US$12.35 in premarket trading on Friday, just shy of the offer price. Mitel shares jumped 22 per cent.

The deal could be a setback for activist investor Elliott Management, which disclosed stakes in both companies last October and subsequently championed a deal between the two.

Mitel said in April it would buy Polycom for about US$1.96 billion in cash and stock.

Mitel said on Friday it would not raise its offer for Polycom and waived its right to match Siris' offer.

As a result, San Jose, California-based Polycom will pay Mitel a termination fee of US$60 million.

Siris Capital, which had previously made an offer of US$12.25 per share for Polycom, said it would fund the deal through a combination of equity and debt.

Elliott disclosed a stake of 6.6 per cent in Polycom in October and a 12 per cent stake in Mitel in May.

Morgan Stanley was the financial adviser to Polycom, while Moelis, Evercore and Macquarie Capital were advisers to Siris Capital Group.