AC3 emerges as frontrunner to acquire Bulletproof

After rejecting a AU$17.9 million takeover bid from Macquarie Telecom, Bulletproof has labelled an offer made by AC3 the 'most executable'.

A few days after officially rejecting an acquisition offer from Macquarie Telecom, cloud services firm Bulletproof has told shareholders it has received interest from a "number of parties" keen to acquire its business.

In a statement issued to the Australian Securities Exchange (ASX) on Monday, Bulletproof highlights an offer from software firm Klikon Group Holdings Pty Limited -- trading as the Australian Centre for Advanced Computing and Communication (AC3) -- as being the most executable.

AC3 has offered Bulletproof 15.2 cents per share to wholly acquire the company.

Bulletproof said the offers are not directly comparable to the Macquarie takeover offer, and they are "incomplete, subject to conditions, not binding, and there is no certainty that the proposals will lead to a takeover offer or control transaction for the company".

Several bidders have also requested further time for due diligence.

Bulletproof did say however that all of the proposals, including the one from AC3, contemplate higher offers for the Bulletproof shares than the takeover offer of 11.0 cents per share made by Macquarie in November.

Macquarie currently claims an interest in just over 26 million shares, representing a 16.11 percent stake in Bulletproof by way of a deal with an associated entity of the company's CEO, the Woodward Family Company.

The AU$17.9 million figure was for Macquarie to buy the remaining 83.89 percent of Bulletproof it did not already own.

Bulletproof instructed shareholders to reject the offer made by Macquarie on December 22 on the grounds that it was "not fair and not reasonable".

However, the document issued to the Australian government's Takeovers Panel highlighted majority Bulletproof shareholders with an interest in 19.86 percent of the Bulletproof shares on issue had written to Bulletproof and advised they would not be accepting the offer from Macquarie.

"As a result of the position of these major shareholders, the offer is unlikely to succeed on its current terms," Bulletproof said.

In addition, the company told shareholders the offer from the Australian IT giant does not reflect the strategic value of Bulletproof's cloud business, nor does it take into account the potential profitability of the company.

Macquarie Telecom's offer needed approval from 90 percent of Bulletproof shareholders to proceed.

In early December, Bulletproof co-founder Lorenzo Modesto told ZDNet he was opposing the takeover bid made by Macquarie.

Modesto, whose company Domains and Web currently boasts a 12.6 percent stake in Bulletproof -- second only to Macquarie -- said he wants a higher valuation before letting his shares go.

"The unaudited Q1 management reports released by Macquarie in the bidder's statement show a strong improvement on the previous corresponding period and include a budget which, if achieved, would indicate a far higher valuation for the company," Modesto said.

"As such, Macquarie's claim in the bidder's statement that 'based on Bulletproof's unaudited management accounts for Q1 FY18 there is a continuation of this trajectory' would seem to be inconsistent with the management accounts released.

"As a result, Domains and Web will not be accepting the bid as it currently stands, as we do not believe it delivers satisfactory shareholder value."

Three days after the Australian heavyweight made a bid for Bulletproof, Microequities Asset Management (MAM) upped its shareholding in the company from 5.28 percent to 6.5 percent, increasing the difficulty for a successful sale.

Bulletproof, founded in 2000, listed on the ASX after performing a reverse takeover of Western Australian-based mining company Spencer Resources in early 2014.

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