- Webcentral (WCG) and 5G Networks (5GN) agree to a merger, under which WBC will acquire 100 per cent of 5GN shares
- The move concludes nearly 12 months of acquisition speculation and is tipped to produce $2 million in cost synergies
- Under the arrangement, 5GN shareholders are set to receive two Webcentral ordinary shares for each 5GN share held
- 5GN directors have recommended its shareholders accept the deal, which will be voted upon in October this year
- Webcentral shares are up 5.26 per cent and trading at 50 cents, while 5G Networks shares are up 7.16 per cent to trade at 96 cents
Webcentral (WCG) and 5G Networks (5GN) have agreed to a merger, under which WBC will acquire 100 per cent of 5GN shares.
Pending shareholder approval, 5GN will become a wholly-owned subsidiary of Webcentral, concluding nearly 12 months of acquisition speculation.
Broadly, the companies believe the merger will diversify the business within its wider corporate strategy to become an ASX300 listed company.
The move is hoped to cut approximately $2 million in operating platform consolidation, corporate cost rationalisation and labour spending and drive a 20 per cent Earnings Before Interest, Taxes, Depreciation, and Amortisation margin.
Under the arrangement, 5GN shareholders are set to receive two Webcentral ordinary shares for each 5GN share they hold at the Scheme record date.
5GN shareholders will hold approximately 52 per cent of the combined entity and Webcentral shareholders will own the remaining 48 per cent once the scheme is implemented.
All 5GN directors are encouraging shareholders, with the exception of Joe Demase and Joe Gangi due to their interests in Webcentral.
The merger is set to be finalised by November this year should it receive necessary shareholder approval at a scheme meeting scheduled for October.
Webcentral shares were up 5.26 per cent and trading at 50 cents, while 5G Networks shares were up 7.16 per cent to trade at 96 cents at 1:37 pm AEST.