AUCyber Receives Competing Takeover Proposal, Share Price Jumps 11.5%

December 24, 2024 11:41 AM AEDT | By Team Kalkine Media

AUCyber Receives Competing Takeover Proposal, Share Price Jumps 11.5% — Image source: shutterstock

Details of the Competing Proposal

The takeover proposal from Brennan is non-binding and conditional, with several prerequisites for implementation:

Completion of satisfactory due diligence by Brennan.
Maintenance of AUCyber’s ordinary business operations, with no significant changes to its operations or liabilities beyond those previously disclosed.
No changes to AUCyber’s share capital, with all non-ordinary securities acquired or canceled for nominal consideration.
AUCyber is restricted from declaring or paying dividends or making acquisitions/disposals exceeding $100,000 in value.
Transaction costs, including advisory expenses, must not surpass $1.7 million.
Brennan must secure credit approval from its existing lender.

While the proposal reflects an attractive premium for shareholders, AUCyber has clarified there is no certainty it will lead to a binding transaction for shareholder consideration. This announcement does not constitute a formal takeover bid under section 631 of the Corporations Act.

Market Reaction

News of the competing proposal has been met with optimism in the market, driving AUCyber’s share price up by 11.5% to 14.5 cents at the time of writing. Investors have reacted positively to the prospect of increased shareholder returns, given the significant premium offered by Brennan compared to the 5GN bid.

Strategic Implications

The competing takeover proposal underscores AUCyber’s strategic value in the market, attracting interest from major players in the industry. The Brennan proposal also highlights confidence in AUCyber’s potential for growth and profitability under new ownership.

The Company is expected to carefully assess both takeover bids in consultation with its advisors to determine the best course of action for its shareholders. In the coming weeks, AUCyber will likely provide updates regarding negotiations and potential next steps as it navigates this critical juncture.

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