Joe Demase (5G Networks, Webcentral)
Webcentral is keeping firm on its unsolicited proposed takeover offer of $26.3 million for Cirrus Networks (CNW), claiming its bid is “fully priced”.
In late July, the recently merged IT services company announced its intentions to acquire Perth-based IT service provider Cirrus Networks Holdings for roughly $26.3 million, at 3.2 cents per share, with Cirrus telling its shareholders to reject the unsolicited offer on the basis that it did not offer enough benefits and represented an “inadequate control premium”.
In mid-August, Webcentral then said it was looking to depose three quarters of Cirrus' board and force a general meeting following what it claimed was the release of unsatisfactory financial results, a tactic that bears a striking resemblance to 5G Network’s move to acquiring Webcentral.
Now, it has been revealed that Cirrus’ lawyers wrote to Webcentral’s lawyers on 23 August, claiming they would give access to due diligence material on the condition that the IT services company provide “agreement in principle to revise the terms of the offer to pay an adequate control premium for Cirrus”.
“A bidder such as Webcentral should not be expected to agree to increase its offer in advance of being provided with appropriate due diligence information,” a statement submitted by Webcentral to the Australian Securities Exchange (ASX) said.
“Based on publicly available information, Webcentral considers its takeover bid fully priced.”
While Webcentral accepts that Cirrus directors view the company as undervalued, the IT services company claims the directions haven’t been acquiring shares or have indicated how they plan to turn around Cirrus’ market perception.
“In the absence of any clear strategy to improve shareholder value, the directors should be considering attracting the best possible sale price,” Webcentral’s statement added.
“However, there is no discernible evidence of CNW seeking to implement a sale process and attract competing bidders. If CNW has made a data room available to potential bidders, Webcentral quite reasonably expects that it would also have been invited into the data room.”
