Mitel wants to buy ShoreTel for $8.10 per share in cash. I don't know which is crazier: Mitel for offering, or ShoreTel's board for turning the offer down. I'll go with ShoreTel, because Mitel has a couple of good reasons to do the deal.

Total value for ShoreTel at $8.10 a share adds up to $540 million, a "24 percent premium" to ShoreTel's closing stock price on October 17, 2014 and a 30 premium to "ShoreTel's enterprise value" -- whatever that is.

ShoreTel's board turned Mitel down flat, but Mitel says the proposal will remain open until 5 p.m. on November 20, 2014.  Announcing the offer in public basically stirs up anyone that views themselves as an "activist shareholder" and the 157 institutional shareholders that hold a bit less than 83 percent of the stock.

Mitel's press release indicates that it started discussions with ShoreTel on October 2, so there's no big surprise here, other than ShoreTel is either holding out for more money, thinks it can keep trucking along as an independent company, or hopes it might get a better offer from another suitor.

Let's look at the broader market for a minute and ask two questions: What does Mitel get in buying ShoreTel? What would another company get by buying ShoreTel?

Mitel says it would get a strong and complementary market footprint in the U.S., where ShoreTel does more than 90 percent of its business. The irony here is ShoreTel kicked off the M&A big thoughts by buying M5 Networks back in 2012 for a boatload of stock, doing so because it needed a cloud services play since businesses weren't buying dedicated IP PBX solutions in the great and large numbers as they once did.

Anyone buying ShoreTel would get a company that is a mixed rating by stock analysts. Over the past fiscal year, ShoreTel has gone from losing $0.45 per share to only $0.03 cents per share. Analysts think ShoreTel will go positive on earnings this year, and has very low debt-to-equity. Four analysts had the stock rated as a strong buy three months ago, with one recommending a hold.

You can't really say ShoreTel screams "Buy" with any stretch of the imagination. It will be interesting to see if and how the ShoreTel board of directors explains why it turned down a 24 percent premium on its stock price in cash.

And let's not discount the value of cash. For investors, cash is clean and pure. It doesn't have stock lockup periods or dilutions or reverse splits or other funny business. Maybe ShoreTel's board wants cash with a stock sweetener, but if they aren't talking to ask for a better deal, that's another story.

Some analysts say the merger of ShoreTel and Mitel would bump up the number three and four market share players for on-premise gear plus UC services in the U.S. to number two, pushing Avaya down to number three. But that all depends on how you slice and dice the numbers.

Mitel bought Aastra in 2013 to increase its market share in Europe, so I can buy into the idea of it buying ShoreTel to boost its market share in the U.S. How this plays out on a wider canvas of mergers in the IP communications space is still unknown. There are any number of smaller pure play cloud service providers that might be adopted by a Cisco or Avaya and nobody's pushed the envelope on consolidation yet.