Bulletproof advises rejection of MacTel takeover bid

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Bulletproof advises rejection of MacTel takeover bid

Bulletproof's board has written to shareholders advising them to reject of a proposed 100 percent takeover by Macquarie Telecom.

In a notice released to the ASX, Bulletproof reported the independent board committee directors had unanimously recommended shareholders reject the offer, and that they themselves would reject the offer with respect to the shares they held.

The independent expert appointed by Bulletproof to review the offer determined that it was "not fair and not reasonable", that the offer was opportunistic because it reflected a historical low in the price of Bulletproof shares, and that the offer did not reflect the strategic value and potential profitability of Bulletproof as a cloud services provider, particularly in light of its recent restructuring.

The board also noted that the offer conflicted with efforts of the independent committee to pin down the strategic value of Bulletproof through discussions with potential competing bidders, and that major shareholders constituting a 19.86 percent holding of the company had written to Bulletproof advising they would not accept the offer in its current form.

Macquarie Telecom launched its bid to acquire the ASX-listed cloud and hosting provider in November in a deal valued at $17.9 million. The acquisition offer was based on a price per Bulletproof share of $0.11, which at the time of the announcement represented a near-65 percent premium on Bulletproof's most recent closing price of $0.067c.

Following that announcement, Bulletproof's major shareholder's publicly stated they would reject the offer.

Microequities Asset Management, Bulletproof's third-biggest shareholder, said it would reject the bid in "its current form" of 11 cents per share. Chief investment officer Carlos Gil called the bid "highly opportunistic and unreasonable," arguing that the company had scale, technical prestige and an enviable corporate client base.

In early December, Bulletproof's second-largest shareholder – a company owned by Bulletproof co-founder Lorenzo Modesto – also indicated plans to reject the bid. Modesto told CRN that his company, Domains and Web Pty Ltd, which holds 12.63 percent of Bulletproof's shares, would not accept MacTel's current bid as it stands.

He said the bid did not deliver satisfactory shareholder value based on Bulletproof's unaudited Q1 results, which show an improvement on the previous reporting period and the chance for a financial turnaround.

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