Leading supplier of telecommunications and cloud services Inabox Group Limited’s (ASX: IAB) shares went down by 1.031% on 10 December 2018 after SB&G (Telecoms) Pty Ltd announced the withdrawal of takeover offer. In a letter addressed to Inabox’s Chairman Mr. David Rampa, the Directors of SB&G (Telecoms) Pty Ltd Mr. Paul Salter informed that SB&G Telecoms is withdrawing its proposed Offer to acquire all the shares of Inabox.
On 15 November 2018, Inabox had received a notice from SB&G (Telecoms) Pty Ltd in which SB&G was intending to make an all-cash offer for the acquisition of all the Inabox’s shares through a conditional off-market takeover bid at a price of $0.90 cash per share (Offer). Later on 3 December 2018, the company revised its offer from $0.90 to $0.95 per share which was subject to three conditions, the first of which was that IAB shareholders not approve the disposal of IAB's main undertaking to MNF Group Limited ACN.
In the recently held Annual General Meeting (AGM), Inabox announced that its shareholders have approved the disposal of IAB's main undertaking to MNF Group. It means that the No Approval Defeating Condition has been triggered and can no longer be satisfied, which is why SB&G Telecoms has now withdrawn its proposed Offer.
According to MNF Group, SB&G revised proposal was incomplete, and it was having a high degree of complexity and execution risk which is why MNF has considered its agreement as superior. At the AGM, the chairman of the Inabox informed that the company’s directors believed that in the absence of a superior offer by SB&G, the best interest of Inabox’s shareholders would be to sell the Indirect business to the MNF Group. Under the Improved MNF Transaction, the purchase price was increased to $34.5 Mn on a debt-free basis with the full purchase price payable at or shortly after completion.
On 6 December 2018, Inabox Group released a statement stating that given the expected $0.90 per share return and certainty under the Improved MNF Transaction, the board of Inabox has unanimously recommended its shareholders to vote in favor of the Improved MNF Transaction in the absence of a superior proposal. And, the board also recommended its shareholders, not to take any action with respect to the Improved SB&G Takeover Offer when it is made.
In FY 2018, Inabox earned a revenue of $101.1 million which was 12.2 percent higher than the prior year. Further, the company earned an Underlying EBITDA of $5.1 million in FY 2018 which was 16.4 percent less than FY 2017. In FY 2019, the company is expecting the underlying EBITDA to be around $5 million.
In the last six months, the share price of the company increased by 42.65 percent as on 7 December 2018. IAB’s shares traded at $0.960 with a market capitalization of circa $23.1 million as on 10 December 2018 (AEST 4:00 PM).
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