iscover
Share this article on:
Powered by
MOMENTUM
MEDIA
Webcentral has updated the market on the proposed takeover proceedings relating to Cirrus Networks, of which it is a major shareholder.
Webcentral offered an implied market capitalisation of $29.7 million or 15 times EBITDA, but Cirrus Networks has indicated it would reject the Webcentral bid of 3.2 cents a share, on the basis that the company was undervalued.
In a statement to the ASX, Webcentral outlined that that CNW agreed to give access to due diligence on the condition that it would up its takeover offer, adding that it should not be expected to agree to a higher offer in advance of being provided with appropriate due diligence information.
Following Webcentral's call for a spill of the CNW board earlier this month, on the back of what it called unsatisfactory financial results. CNW is yet to convene a general meeting of shareholders to consider that spill, as required by Monday 6 September 2021.
Based on the 928,715,314 CNW shares currently on issue, Webcentral’s offer of 3.2 cents cash per share implies a market capitalisation of $29.7 million.
Webcentral believes its takeover bid fully values CNW based on publicly available information, being EBITDA of $1.9 million. This implies an EBITDA multiple of 15 times, well beyond conventional market pricing for a company in CNW’s position.
The one month offer period for Webcentral’s takeover bid formally commenced on Monday, 16 August 2021 and is scheduled to close on Thursday, 16 September 2021 (unless extended or withdrawn in accordance with the Corporations Act).
Subject to the Corporations Act, the last date for Webcentral to increase or extend the offer is Wednesday, 8 September 2021.
Webcentral notes that although the CNW directors assert that the company is undervalued, none of them have been acquiring shares. Nor have the CNW directors indicated how they propose to improve CNW’s market perception.
[Related: Australian government certifies Macquarie Data Centres’ full portfolio]
Nastasha is a Journalist at Momentum Media, she reports extensively across veterans affairs, cyber security and geopolitics in the Indo-Pacific. She is a co-author of a book titled The Stories Women Journalists Tell, published by Penguin Random House. Previously, she was a Content Producer at Verizon Media, a Digital Producer for Yahoo! and Channel 7, a Digital Journalist at Sky News Australia, as well as a Website Manager and Digital Producer at SBS Australia. Nastasha started her career in media as a Video Producer and Digital News Presenter at News Corp Australia.
Be the first to hear the latest developments in the cyber industry.
