An off-market approach by SB&G has forced MNF Group's hand, leading to an increased offer for Inabox's wholesale business of AU$34.5 million.
Last month, MNF announced its intention to acquire the wholesale business for between AU$30.5 million and AU$33.5 million in cash.
SB&G offered Inabox 90 cents a share to acquire Inabox's wholesale business in its entirety, to try and move from its current position of holding just shy of 20 percent of all shares.
With MNF bumping up its offer, the Inabox board has continued to back the sale of its wholesale business only.
"The Inabox board believes the improved MNF transaction provides shareholders with greater certainty and a higher return than the SB&G Offer," Inabox said.
"The Inabox board unanimously recommends shareholders vote in favour of the Improved MNF Transaction in the absence of a superior proposal, and take no action in respect to the proposed SB&G Offer when it is made."
Inabox warned that if the MNF transaction did not go ahead, it would need to raise AU$3 million to pay transaction expenses and maintain working capital requirements before the end of the year.
If MNF's purchase is followed through, and an AU$0.90 payout is given to shareholders, Inabox said it intends to rename itself to IAB Holdings and delist from the ASX as it winds up the company and its remaining subsidiaries.
Approval for the transaction is set to be determined at the resumption of Inabox's adjourned AGM on December 7.
"MNF Group is a natural buyer for our indirect business, and I am confident that our staff, customers, and suppliers will benefit from becoming part of a larger, highly successful company," Inabox CEO Damian Kay said in October.
In August, 5G Networks picked up the direct businesses of Inabox for AU$5.7 million in cash.
During the same month, MNF reported that FY18 revenue jumped by 15 percent to AU$220.7 million, with net profit down 1.7 percent to AU$12 million, and earnings before interest, tax, depreciation, and amortisation (EBITDA) up by 3 percent to AU$24.6 million following the relaunch of Pennytel and its MVNO deal with Telstra Wholesale.