5GN Secures 50.71% Stake in AUCyber; Offer Closes 17 February 2025
AUCyber Limited confirms control has passed to 5GN following a substantial holding disclosure, with the Board unanimously recommending shareholders accept 5GN's last and final offer closing on 17 February 2025.
- 5GN acquires 50.71% voting power, gaining control of AUCyber
- 5GN's revised offer declared last and final, closing 17 February 2025
- AUCyber Board unanimously recommends prompt acceptance absent superior proposal
- Company faces heightened financial risks and will incur $1.9 million in transaction costs
- Board changes include resignation and new appointments following control shift
Change of Control Confirmed
AUCyber Limited (ASX: CYB) has officially acknowledged that 5G Networks Limited (5GN) has crossed the critical threshold of 50% voting power, now holding 50.71% of AUCyber shares. This milestone marks a definitive change of control, effectively placing 5GN at the helm of the cyber security and sovereign cloud services provider.
The announcement follows 5GN’s recent ASX disclosures and substantial holding notices, confirming their dominant position in AUCyber’s shareholder register. This shift triggers significant strategic and governance implications for the company and its investors.
Final Offer and Board Recommendation
In response, AUCyber’s Board has issued its third supplementary target’s statement, reinforcing a unanimous recommendation that all shareholders promptly accept 5GN’s revised offer. This offer, declared 'last and final,' is scheduled to close at 4:00pm Melbourne time on Monday, 17 February 2025, with no further extensions permitted.
The Board’s endorsement is clear: in the absence of a superior proposal, acceptance is the prudent course. Directors themselves intend to accept the offer for shares they hold or control, signaling confidence in 5GN’s bid and the future direction under new ownership.
Financial Viability and Transaction Costs
However, the transition is not without challenges. The Board highlights heightened risks regarding AUCyber’s financial viability, noting ongoing cash outflows of approximately $600,000 per month and available cash reserves of $4.7 million as of 31 December 2024.
In addition, the company will incur transaction costs estimated at $1.9 million related to the takeover process. These include run-off insurance premiums, advisory fees, employee transaction bonuses, and other associated expenses, which will further pressure cash reserves during this period of uncertainty.
Governance Changes Underway
Reflecting the change in control, the Board composition is already shifting. Mr Craig Scroggie has resigned, while 5GN representatives Mr Hugh Robertson and Mr Joseph Demase have joined as directors. Executive Chair Ms Cathie Reid and Director Mr Ross Walker will remain until the offer period concludes, ensuring governance continuity before further board reconfigurations aligned with 5GN’s final voting position and the company’s listing status.
Implications for Minority Shareholders
The Board cautions that shareholders who do not accept the offer risk becoming minority holders, a position fraught with uncertainty given the company’s financial outlook and restructuring plans. The implications for minority shareholders could be significant, potentially affecting liquidity, influence, and value realization.
As the offer deadline approaches, shareholders must weigh these risks carefully against the Board’s firm recommendation and the strategic direction under 5GN’s stewardship.
Bottom Line?
With control secured and the final offer deadline looming, AUCyber’s next chapter hinges on shareholder response amid financial headwinds.
Questions in the middle?
- Will any superior proposal emerge before the 17 February offer deadline?
- How will 5GN’s control influence AUCyber’s strategic direction and financial restructuring?
- What are the long-term implications for minority shareholders who reject the offer?
