Bulletproof investors told to knock back Macquarie’s acquisition overtures

The independent expert appointed to review Macquarie's proposal concluded that the offer is not fair and reasonable

Bulletproof (ASX:BPF) shareholders have been told to knock back the proposed $17.9 million takeover deal flagged by Macquarie Telecom Group (ASX:MAQ) in November.  

The publicly-listed cloud services firm told shareholders on 22 December that the independent board committee (IBC) directors charged with weighing up Macquarie’s offer have unanimously recommended that shareholders reject the offer.  

Additionally, the IBC directors intend to reject the offer in relation to the Bulletproof shares they respectively hold or control. As such, the company told investors that if they wanted to reject the offer they should simply ignore all documents from Macquarie and do nothing.

The reasons behind the IBC directors’ decision to reject the offer included the opinion of the independent expert appointed to review the proposal, who concluded that the offer is not fair and reasonable.  

Additionally, the IBC directors suggested that the offer is opportunistic and reflects an historical low in the price of Bulletproof shares, and it does not reflect the strategic value of Bulletproof.  

Other reasons behind the decision included the opinion that the offer does not reflect the potential profitability and value of Bulletproof following its recent restructure.

In February, Bulletproof announced it was letting go of 30 full-time engineers, which would result in $4.5 million savings.

Macquarie Telecom revealed on 21 November it had made an off-market bid via its Macquarie Cloud Services subsidiary to acquire all Bulletproof's ordinary shares for $0.11, equating to almost $18 million.  

"The proposal to purchase all of Bulletproof’s shares for cash is clearly compelling and offers a significant premium to the recent share price performance," Macquarie chief executive, David Tudehope, said. "Bulletproof has experienced a deterioration of earnings over the last 18 months."  

"The combination will enable Macquarie and Bulletproof customers to access a full set of cloud options of colocation, private cloud and public cloud. We believe it is in the interests of Bulletproof shareholders to accept the Macquarie offer,” he said.  

However, Bulletproof’s IBC subsequently agreed to open a "data room" in order to facilitate due diligence reviews by parties considering making alternative offers to the one from Macquarie Telecom.  

On 13 December, Bulletproof announced its intention to open a data room. The committee subsequently agreed to make it available to “a number of parties who have expressed interest in making alternative offers”.