Cirrus rejects Webcentral’s claim it refused to engage about takeover

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Cirrus rejects Webcentral’s claim it refused to engage about takeover

Cirrus Networks has denied several claims made by Webcentral last week regarding the latter’s ongoing attempts to acquire Cirrus by purchasing all shares it does not already own.

Cirrus turned accusations of ‘lack of engagement’ back at Webcentral, claiming that an invitation was extended by a board director to contact Cirrus chairman Andrew Milner on 1 August and 5 August, but “neither invitation was accepted or acted upon by Webcentral.”

A source close to the matter told CRN that Webcentral’s approach has been unusual for the small market in which it operates, as it did not engage Cirrus at any point before making the takeover attempt.

Webcentral Friday said that Cirrus was refusing to allow due diligence to occur unless a higher bid was made. However, Cirrus has claimed that the terms it sought were actually proof of the capability of a higher offer, as well as a confidentiality deed.

It also claimed that Webcentral’s offer is not “fully priced” as claimed.

Webcentral’s offer of $0.032 per share is 9.3 percent below the last closing price of $0.035 per share, Cirrus said, adding that the company’s share price has “consistently traded above the Offer price since the announcement of the Offer.”

Cirrus also claimed that, contrary to what Webcentral has said, it has been in discussion with counterparties, although they remain preliminary and non-binding.

CRN understands that Cirrus acknowledged in July that its yearly results were going to lower, and following the results the company saw a dip in share prices to $0.029 per share. 

The Cirrus board said that the timing and value of Webcentral’s offer show it is “opportunistic and disingenuous” and they continue to urge shareholders to vote to reject the offer.

Webcentral has also made moves to oust all but one member of the Cirrus board.

Cirrus Networks has appointed an independent expert to prepare a report on whether the expert believes the offer is fair and reasonable.

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