Macquarie Telecom Group's bid to wholly acquire competing cloud services provider Bulletproof has been thrown another curveball, with Bulletproof co-founder Lorenzo Modesto opposing the takeover.
Modesto, whose company Domains and Web currently boasts a 12.6 percent stake in Bulletproof, told ZDNet he wants a higher valuation from Macquarie.
Domains and Web, trading as Domains.com.au, holds the second-highest stake in Bulletproof after Macquarie.
"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."
Macquarie Telecom's offer needs approval from 90 percent of Bulletproof shareholders to proceed.
Modesto co-founded Bulletproof with CEO Anthony Woodward in 2000, and held roles as the company's chief operating officer and director of strategy during his tenure.
He exited the company officially on September 1, 2017.
Macquarie announced last month that it was looking to buy the remaining 83.89 percent of Bulletproof for AU$17.9 million, or AU$0.11 per share.
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.
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.
"Microequities considers Macquarie Telecom's bid to be highly opportunistic and unreasonable," Microequities chief investment officer Carlos Gil said. "It provides inadequate consideration for a business that generated circa AU$50 million of revenues in FY17 and is the leading Amazon Web Services consulting partner for the Australian and New Zealand markets.
"Bulletproof management's internal forecast is for an EBITDA result in FY18 of AU$5.5 million, meaning Macquarie's bid represents an extremely low 3.77x EBITDA multiple."
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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