NetRegistry cries foul at failed WebCentral bid
NetRegistry made a late offer to acquire WebCentral in recent weeks, despite a lack of support from the hosting company's board, which had previously in May indicated its support for an acquisition by Melbourne IT.
Melbourne IT is Australia's biggest domain name registrar, with NetRegistry close behind.
The Melbourne IT buyout is now slated to go ahead after NetRegistry's ambitions were dismissed yesterday at a meeting of WebCentral shareholders.
At the shareholder meeting, WebCentral chair Lucy Hughes-Turnbull claimed NetRegistry had made "an unsolicited, financially uncommitted and indicative proposal involving a number of separate but inter-conditional changes".
"The indicative proposal is complex, conditional and provides none of the certainty of the Melbourne IT proposal," Hughes-Turnbull added.
However in a statement issued today NetRegistry chief executive Larry Bloch disagreed. His company and partner HostWorks had raised AU$60 million in committed debt and cash, he said.
"[WebCentral's] statement that our proposal required WebCentral to raise an additional AU$15 million equity is simply false," he said.
The company had a number of equity partners able to fund the balance in the "unlikely event" all WebCentral shareholders opted for NetRegistry's cash buy back offer, according to Bloch.
The AU$15 million equity requirement would have decreased if some shareholders retained their shares, he added.
Bloch also pointed out NetRegistry had more experience in the hosting market than Melbourne IT, adding the NetRegistry proposal would structure WebCentral in such a way as to unlock greater value from the business.
"We believe the value of our proposed bid is far greater than Melbourne IT's -- both in cash and potential upside," said Bloch. "What we lacked was support by WebCentral's Board. Our view was that the support of the WebCentral Board was the pivotal condition remaining for our proposal."
WebCentral has around 70,000 customers in total, ranging from large corporate and government bodies like Education Queensland and the Australian Rugby Union, to many small to medium enterprises (SMEs).