The 5GN takeover bid would be one 5GN share for every 12 Webcentral shares, and would require a minimum of 50.1% of shares to go ahead. The proposal will also see 5GN pay off Webcentral debts via a loan to the company. Currently 5GN holds a 10.2% strategic interest in Webcentral.
Under the 5GN Proposal, the implied price in their proposal is for A$0.177 (US$0.125) per Webcentral share (based on 5GN’s closing share price on Thursday, 3 September 2020) (Offer Price) which implies an equity value of WCG of approximately $21.6 million (US$14.93m). The offer envisages synergies across the combined organisation of A$7 million (US$4.84m) per annum where they would own 100% of Webcentral.
Webcentral had viewed the 5GN bid as superior to Web.com’s bid, but under the matching period allowed Web.com provided a counterproposal to Webcentral offering to increase the cash consideration payable under the Scheme to $0.155 (US$0.11) for each Webcentral share. The original bid in July was for A$0.083 per share valuing Webcentral at A$12.2 million.
Currently Webcentral is assessing whether it considers the Web.com counterproposal would deliver an equivalent or superior outcome to Webcentral shareholders when compared to the 5GN Proposal.
Webcentral Group, previously Melbourne IT Group, includes Melbourne IT, Netregistry, Domainz and WME among its domain name brands while Web.com’s domain name brands include Network Solutions, Register.com and SnapNames.