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Telecommunications Melbourne IT to buy WebCentral
Telecommunications Melbourne IT to buy WebCentral | Melbourne IT to buy WebCentral |
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| by Stuart Corner | |
| Monday, 22 May 2006 | |
  
Melbourne IT CEO and managing director, Theo Hnarakis, said the proposed consideration valued each WebCentral share at $1.53, a 43 percent premium over the 5-day volume weighted average price to Friday 19 May 2006. WebCentral shareholders will also have the option of taking a portion of the consideration as shares in the merged entity. "The post merger group will bring together Melbourne IT's domain name and brand protection experience with WebCentral Group's hosting and business solution expertise to provide our channel partners and customers with a range of services to optimise their online success," said Hnarakis. The combined entity will annual sales of over $130 million (based on 2005 results) and approximately 400 staff worldwide. According to Hnarakis, "the increased scale of the business will help facilitate an acceleration of innovation and investment in future growth. Furthermore, we will be able to deliver efficiencies in service delivery to enhance the success of our customer base." The proposed acquisition has the unanimous support of WebCentral's board - whose members between them hold about 47 percent of the company's shares - but will require a vote of shareholders that will be taken at a meeting likely to be held in late August. WebCentral chair, Lucy Turnbull said: "This transaction will create a much larger company with greater scale and breadth of operations which will benefit both shareholders and customers. There are expected to be significant merger synergies." Under the scheme, WebCentral shareholders will be able to choose between taking half a new share in Melbourne IT plus 63 cents in cash; or one third a new share in Melbourne IT plus 93 cents in cash. It is proposed that Turnbull and another WebCentral director, Sean Howard will join the Melbourne IT board if the scheme is approved. Melbourne IT is being advised on the transaction by Investec Bank. WebCentral Group is being advised by Deutsche Bank. |
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