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Webcentral rejects Web.com buyout bid for LOWER offer from Aussie telco

Kevin Murphy, September 18, 2020, Domain Registrars

Pioneering registrar Webcentral has turned down Web.com’s offer to acquire it in favor of a lower offer from telecommunications company 5G Networks.

The company announced this week that 5GN will pay one share for ever 12 shares of Webcentral, which works to to between AUD 18.7 million and AUD 19.5 million ($14.24), depending on which trailing average price you use.

That’s between AUD 0.153 and AUD 0.16 per share, compared to Web.com’s recently increased bid of AUD 0.18 per share.

It’s a 138% premium based on 5GN’s September 16 closing price and Webcentral’s closing price before the Web.com deal was announced two months ago.

So why take the lower offer? Webcentral offered a few reasons, the most compelling of which was that there seems to have been a certain amount of arm-twisting going on.

The Web.com deal would have required 75% of Webcentral’s shares to be voted in favor of the acquisition and 5GN already owned over 10% and said it would vote them against. The 5GN deal only requires it to acquire 50.1% of the shares.

5GN will also pay off Webcentral’s debts and pay Web.com the AUD 500,000 penalty incurred for breaking the original July deal.

Webcentral was previously known as ARQ Group and, as one of the original five ICANN=accredited registrars, Melbourne IT. It owns the registrars Netregistry and Domainz. it became Webcentral after selling its wholesale business to CentralNic and its enterprise unit to private equity.

5GN, despite the name, is a largely wire-based telco and hosting provider. It doesn’t currently own any registrars.