Bulletproof's second-largest shareholder – a company owned by Bulletproof co-founder Lorenzo Modesto – has indicated plans to reject Macquarie Telecom's bid to acquire the cloud provider for $17.9 million.
MacTel revealed its bid to acquire Bulletproof last month for 11 cents per share, representing a 64 percent premium of its then-trading price and 3.7x the company's earnings.
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 does 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.
Bulletproof's Q1 report showed an EBITDA profit of $600,000, an improvement on the $1.2 million loss in the last corresponding period. Bulletproof's internal forecast showed full-year EBITDA of $5.5 million in FY18, an improvement on the $2.1 million EBIT loss in FY18.
Bulletproof's third-largest shareholder, Microequities Asset Management previously raised similar concerns with MacTel's bid, calling it "highly opportunistic" given the company's positive financial outlook.
Microequities increased its stake in Bulletproof to 6.5 percent before announcing its intent to reject the acquisition.
MacTel's bid is contingent on the offer securing at least 90 percent acceptance from shareholders, however, the combination of Bulletproof's second and third-largest shareholders represent 19.13 percent ownership.
Bulletproof's largest shareholder is a financial trust associated with co-founder and chief executive Anthony Woodward, accounting for 16.11 percent of shares. MacTel already has the option to acquire Woodward's shares via a call option bid.
Bulletproof still has not presented a final decision on whether to recommend shareholders accept MacTel's proposal.