Webcentral Set To Remain In Australian Ownership As Directors Reject Web.com’s Revised Bid

Webcentral, whose best known brand is Melbourne IT, has recommended shareholders accept a late bid from Australian telecommunications carrier 5G Networks rather than a revised bid from Web.com.

Previously Webcentral Group Limited, whose best known brands apart from Melbourne IT are Netregistry, WME and Domainz, had recommended the Web.com bid. But this recommendation has now been withdrawn by the company’s directors. Webcentral has now terminated the Scheme Implementation Deed dated 12 July 2020 and paid the $500,000 reimbursement fee to Web.com as required under the Scheme Implementation Deed according to a notice on the Webcentral website. The scheme of arrangement will not proceed and Webcentral will apply to the Supreme Court of New South Wales for orders confirming that the scheme meeting of Webcentral scheduled for 29 September 2020 not be held.

Under the bid from 5GN, shareholders will receive 1 5GN share for every 12 of Webcentral shares and 5GN will pay out Webcentral’s debts of around $7 million. In their announcement to shareholders, Webcentral said their “Directors unanimously recommend that you ACCEPT THE OFFER in the absence of a superior proposal.”

Seven reasons were given for accepting 5GN’s proposal in 5GN’s bidder’s statement:

  1. The implied value of the Offer Consideration represents an attractive significant premium to the recent trading value of Webcentral Shares
  2. The Offer is unanimously recommended by Webcentral’s board of directors, in the absence of a Superior Proposal
  3. If the Offer is successful 5GN will provide a loan to Webcentral to allow Webcentral to pay out its Existing Debt Facilities to its Existing Financiers in full, relieving Webcentral of its debt burdens
  4. 5GN has significant acquisition and turnaround expertise having acquired 7 businesses since 2017
  5. There is currently no Superior Proposal or alternative offer for your Webcentral Shares which is capable of acceptance
  6. Accepting the Offer will allow you to de-risk your existing investment in Webcentral within a larger, more diversified and liquid vehicle that is 5GN
  7. The Webcentral Share price may fall if the Offer lapses

All Webcentral Group’s investor information is available from: webcentralgroup.com.au/investors

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