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Bulletproof calls out MacTel for asking shareholders to accept takeover offer

Australian-listed Bulletproof has written to shareholders asking they ignore a letter sent by Macquarie Telecom that “urges” they accept the offer it made to wholly acquire the cloud services firm.

“Your independent board committee maintains its unanimous recommendation that you reject the Macquarie Telecom takeover offer of 11 cents per share and disregard materials sent to you by Macquarie Telecom,” Bulletproof wrote.

The takeover offer Bulletproof is referring to was made by Macquarie Telecom, on behalf of subsidiary Macquarie Cloud Services, back in November.

The Australian heavyweight made a AU$17.9 million bid to acquire the remaining 83.89 percent of Bulletproof shares that it does not own, at a cost of AU$0.11 per share.

Following the initial bid from Macquarie, ZDNet reported that the offer faced hurdles from significant investors, with Microequities Asset Management increasing its stake to oppose the deal, and Bulletproof co-founder Lorenzo Modesto saying the bid was too low and that his company’s 12.6 percent stake would be used to oppose the deal.

The independent expert appointed by the board of Bulletproof to evaluate the offer declared in mid-December that the offer was “not fair and not reasonable”, and low-balled Bulletproof’s valuation by one third. At the time, Bulletproof told shareholders to ignore all documents issued by Macquarie.

“We understand that Macquarie Telecom has told shareholders that its offer of 11 cents is the only unconditional cash offer to acquire all of your Bulletproof shares. However, if Bulletproof shareholders feel inclined to exit their investment in the company now, you are able to sell your shares on market through the ASX,” Bulletproof told shareholders on Tuesday.

“The closing price of Bulletproof shares on the day prior to the date of this letter was 13.5 cents per share — which is materially higher than the Macquarie Telecom takeover offer.”

Software firm Klikon Group Holdings — trading as the Australian Centre for Advanced Computing and Communication (AC3) — made its own bid for Bulletproof earlier this year, offering AU$24.7 million days after Macquarie’s bid was formally rejected.

Bulletproof announced last month it had accepted AC3’s offer.

“We are delighted to present the scheme to shareholders of Bulletproof, as it provides materially better value than the takeover offer announced by Macquarie Telecom Group in November and at an offer price that is compelling for our shareholders,” Bulletproof chair Craig Farrow said in accepting AC3’s offer.

“I’m confident that the combination of AC3 and Bulletproof should also be highly attractive to both our employees and customers, given the capabilities and strength of a combined AC3 and Bulletproof Group.”

On Tuesday, Bulletproof again highlighted the AC3 offer as “materially superior” and told shareholders there is no action required until May, when shareholders will be given the opportunity to vote at a scheme meeting.

“Subject to the conditions of the scheme being satisfied, the scheme is expected to be implemented in June 2018,” the company added.

Bulletproof said it expects to post AU$1.45 million in EBITDA for the first-half of the 2018 fiscal year, a significant reversal of the AU$1.2 million loss made in the first-half of 2017, even as its revenue shrank from AU$24.5 million to a forecasted AU$23.1 million year-on-year.

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