- 5G Networks’ (5GN) proposed buy-out bid has won over Webcentral Group’s (WCG) board, despite a competing cash offer from Web.com
- The company’s board has unanimously recommended the share-for-share deal, which would exchange all Webcentral shares to 5G networks shares on a twelve to one basis
- 5G’s bid was up against a competing cash offer from Web.com, which initially valued Webcentral at 15.5 cents per share before being revised up to 18 cents per share
- As a result of the recommendation, 5G and Webcentral have entered into a bid implementation deed, which will now need to meet 50.1 per cent acceptance to continue moving forward
- Shares in both 5G Networks and Webcentral Group closed in the grey for 1.78 cents and 16.5 cents, respectively
5G Networks’ (5GN) proposed buy-out bid has won over Webcentral Group’s (WCG) board, despite a competing cash offer from Web.com.
Webcentral’s Board of Directors revealed its unanimous approval of the 5G offer at the end of trading on Thursday. The share-for-share deal would exchange every 12 Webcentral shares for one share in 5G networks.
5G’s bid was up against a competing cash offer from Web.com, which initially valued Webcentral at 15.5 cents per share, before being revised up to 18 cents per share. Despite the lure of a hard cash offer, the company’s directors, who hold a collective 19 per cent stake, believes 5G’s offer will open up future business possibilities at lower completion risks and a greater implied value.
Webcentral Chair Andrew Reitzer said the combined group will offer a more appropriate leverage position and funding flexibility to support organic growth and possible future acquisition opportunities than what is presently available.
Meanwhile, Managing Director of 5GN, Joe Demase said the acquisition was exactly what the company has been looking for.
“It will complement existing infrastructure by utilising our available capacity and as a result will drive increased EBITDA across the group. Additionally, the recurring revenue models of both organisations underpins stable and therefore very predictable revenue streams,” he added.
As a result of the recommendation, 5G and Webcentral have entered into a bid implementation deed, which will need to meet a 50.1 per cent acceptance rate to continue moving forward.
However, as 5G’s current 10.7 per cent stake in Webcentral and the 19 per cent directors’ interest are already in favour, the bid needs to only gain a further 20.3 per cent acceptance to be implemented.
Shares in both 5G Networks and Webcentral Group closed in the grey for 1.78 cents and 16.5 cents, respectively.