WCG - Webcentral Limited

[over9k]

From a previous high of $3.70 a share. Ouch.

 

[frugal.rock]

Yes, around middle of last year I received the lesson
"Knife catching 101" from ARQ.
If I recall I was in around 0.45 and lost a fair bit in it.
Another live case study around the same time was DCN.
The lessons successfully taught me how NOT to catch knives....
and has given some insight into how to actually catch a falling knife... without a bloody mess that is.

 

[Dona Ferentes]

1. Webcentral had entered into a scheme implementation deed dated 12 July 2020 with Web.com Group, Inc. under which it is proposed that Web.com will acquire all of the shares in Webcentral for $0.10 per share (the Scheme);
2. Webcentral had received a non-binding indicative proposal from 5G Networks Limited to acquire all of the shares in Webcentral by way of a conditional off-market takeover bid. The consideration under the 5GN Proposal is proposed to be 1 5GN share for every 12 Webcentral shares; and
3. the Webcentral Board had determined that the 5GN Proposal is a Superior Proposal (as defined in the SID and, accordingly, had commenced the matching right process outlined in the SID.

WEB.COM COUNTERPROPOSAL
The matching right period under the SID expired at the end of yesterday. Web.com has provided a counterproposal to Webcentral offering to increase the cash consideration payable under the Scheme to $0.155 for each Webcentral share


- that is a fair hike, 10c to 15.5c per share. Someone thinks it is worth something !

 

[Dona Ferentes]

RECOMMENDS 5GN OFF MARKET TAKEOVER BID ( of 1 5GN share for every 12 Webcentral shares)

Webcentral today announces that:
... the Webcentral Board has determined that neither the Web.com Counterproposal nor the Revised Web.com Proposal (with the revised consideration of $0.18 per Webcentral share) would provide an equivalent or superior outcome for Webcentral shareholders as a whole compared with the 5GN Proposal;
... the Webcentral Board has determined that the 5GN Proposal is a Superior Proposal to the Web.com Counterproposal and the Revised Web.com Proposal, notwithstanding the increased headline cash offer of $0.18 by Web.com; and
... Webcentral has entered into a bid implementation deed with 5GN

 

[Dona Ferentes]

5GN has declared the takeover Offer for WCG unconditional.

As set out in Webcentral’s Target’s Statement, 5GN has agreed that, if it acquires at least 50.1% of the Webcentral Shares, 5GN will (via a subsidiary) provide a secured loan to Webcentral of approximately $47.7 million. Webcentral will, in turn, use the money from that loan to repay its Existing Financiers in full. Webcentral will then owe approximately $47.7 million to 5GN.
Webcentral will have to repay that loan, which will bear interest at a rate higher than the interest rate under the Existing Debt Facilities by approximately 2 times, within 12 months. 5GN has stated that if it does not acquire 100% of the Webcentral Shares, it will require Webcentral to repay the loans provided by 5GN to Webcentral.

In those circumstances, Webcentral may need to undertake an equity raising to repay some or all of the loans provided by 5GN. It is reasonable to expect that any such equity raising will likely be at a material discount to the then prevailing share price and if any Webcentral Shareholders do not participate in that equity raising, they are likely to be materially diluted.

If these risks conflict with your individual risk profile, you should strongly consider these implications in making your decision as to whether to ACCEPT the Offer.

 

[frugal.rock]

At this rate, I might get back into the black for the entry in the yearly comp....go figure. Thought I was a dead duck in the water for a while...

 

[frugal.rock]

At this rate, I might get back into the black for the entry in the yearly comp....go figure. Thought I was a dead duck in the water for a while...

Well, dip me in tar and roll me in feathers...flip n Eck.

 

[frugal.rock]

Well, this is the lesson that just keeps on giving.
Let's just keep reopening the wound and salting it again...eh?!
Bar steward.

 

[Dona Ferentes]

I thought it was a done deal

.... and then (22/12)

Webcentral Group Ltd has today repaid $5.2m of loans advanced to [5GN] in October 2020. This follows the earlier repayment in November 2020 of the $500,000 loan to fund the break fee payable by WCG in relation to the termination of the scheme with Web.com.
The funds repaid will be utilised to partially repay 5GN debt funding bank loans and for other working capital and acquisition opportunities. The remaining loan amount owing from WCG to 5GN is approximately $42 million.

too complex for me

 

[System]

On November 25th, 2021, Webcentral Group Limited changed its name to Webcentral Limited.

 

[Dona Ferentes]

hard to make a buck in telco-land; down nearly 20% today :

• revenue and other income for the period was $96.73 million, representing growth of 5.5% compared to the prior comparative period of $91.69 million.
• The loss of the Group for the period after providing for income tax amounted to $24.38 million (2021:$5.86 million loss).
• The underlying EBITDA of the Group for a goodwill impairment charge of $11.49 million, the period of $17.6 million was 13.5% higher than the prior comparative period of $15.47 million, after adjusting for a non-cash goodwill impairment expense of $11.49 million, non-operating items including share-based payments expense of $8.83 million, restructuring costs of $3.71 million in relation to the merger between the Group and 5G Networks Limited and other non-recurring items, and acquisition costs of $0.90 million.

And they have sold the block stake in Cirrus Networks Holdings Limited (ASX: CNW) in an on-market trade today. The sale of Webcentral’s holding of 172 million shares (18.5% of CNW) will provide a cash inflow of $5.5m. These proceeds will be used to fund potential acquisitions, on-market share buybacks as announced on 3 August 2022 and to reduce debt. Webcentral is reviewing a number of acquisition targets and will pursue these more synergistic high EBITDA-accretive investments.

 

[Dona Ferentes]

Well, this is the lesson that just keeps on giving.

So what 'appening 'ere?

Hmmm. No extra revenue but still making losses.

(DNH)

 

[Dona Ferentes]

And where now .... from Livewire Markets:

Webcentral Ltd (ASX: WCG)​

Shares of Webcentral company rose by 62.5%, primarily due to a substantial holding increase by Tectonic Opportunities Fund, a growth focused, absolute-return hedge fund, with a focus on small caps. The fund bought 16 million shares, and currently holds 5% of total shares on issue. In response to the ASX price query, Webcentral responded that it was not aware of any substantial news that would lead to an increase in price, during the period.

Webcentral is primarily involved in providing domain registrar services, alongside, building, hosting, and providing website security.

The increase in shareholding does come as a surprise, considering that revenue growth was modest for the 1H’FY23, with revenue growing 5% to $48.5 million on the pcp. The company does have a strong sales pipeline but it remains to be seen if revenue will grow by the levels necessary to become profitable. With that said the company is making strides towards this goal. For example, the ARPU (average revenue per user) increased 9% in the 1H’FY23 resulting from the upsell to higher value products.

The domain registrar market is expected to grow relatively slowly and the company has strong competition from alternatives such as Verisign, who have a much larger share of the market.

 

[Dona Ferentes]

A range of challenges

NH,NH

 

[Dona Ferentes]

up 35 per cent .... Speeding ticket due?

 

[Dona Ferentes]

.. more jumping around than venturing into a nest of bullants.

.
Webcentral entered into binding agreements with an investment group based in Europe consisting of Oakley Capital and its partners to sell two-thirds of its Webcentral and Melbourne IT domain name registry, consumer hosting (cPanel hosting) and email hosting services business.

Transaction Highlights
•Total Transaction Value of $165M
•Net cash proceeds of $115M
•Net cash position of $84M after debt repayment and transaction costs
•Retained one-third equity interest in Domains Business
•Agreement to purchase $12M of cloud services and managed support services from Webcentral over 5 years, with a minimum of $4M in the first year
•Completion expected by late-November 2023