This comes despite a last-minute revised offer from rival bidder Web.com, a US-headquartered domain name and web services provider, offering to pay 18 cents per Webcentral share.
Earlier this month, 5G Networks offered to acquire Webcentral for a consideration of 1 5GN share for every 12 Webcentral shares plus a loan to pay off the latter’s debts, two months after Web.com’s original proposal in July.
“The Webcentral board has determined that neither the Web.com counterproposal nor the revised Web.com proposal would provide an equivalent or superior outcome for Webcentral shareholders as a whole compared with the 5GN proposal,” the announcement read.
Web.com originally offered $12.2 million or 10 cents per share, later matching 5GN’s offer for $18.9 million or 15.5 cents per share (the counterproposal). The last minute bump to 18 cents per share (revised Web.com proposal) was submitted yesterday.
Following this decision, Webcentral has entered into a bid implementation deed with 5G Networks yesterday, 17 September 2020.
Webcentral cited some highlights that come with 5G Networks’ offer, including an opportunity to participate in a larger and more diversified business; have a more likely chance to complete the acquisition; a potentially more valuable consideration price based on 5GN’s share price; fewer conditions required; and the provision of funding to repay Webcentral’s debts.
Speaking on the decision, Webcentral chair Andrew Reitzer said, “The 5G Networks offer provides Webcentral shareholders with potential to participate in the significant turnaround opportunity presented by 5GN, where 5GN is proposing to use its expertise and asset base to add significant value.”
“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 to Webcentral.”