After completing due diligence Aussie Broadband (ASX: ABB) has firmed up its takeover bid for Symbio (ASX: SYM) with a binding offer that values the communications software-focused group at $258 million.
While the final offer could be as high as its original non-binding offer of $270 million through the release of dividend franking credits, the clock is ticking on the cash-and-scrip deal which is reliant on the Symbio board recommending shareholders approve of the offer by midnight tomorrow.
Aussie Broadband says its binding offer remains a ‘superior proposal’ to the $243 million bid put forward by Superloop (ASX: SLC) in August, and provides ‘greater certainty to Symbio shareholders with a higher cash component’.
“We note Symbio’s announcement today that Symbio continues to consider the binding offer,” says Aussie Broadband.
“Given the extensive discussions to date, Aussie Broadband intends to withdraw its binding offer at expiry of the current exclusivity deed at 11.59pm Tuesday 31 October 2023.”
Aussie Broadband was granted exclusive rights to undertake due diligence on Symbio after making a non-binding offer on 29 September that valued Symbio at $3.15 per share.
Following due diligence, the company has revised its offer to between $2.95 and $3.002 per share comprising a consideration of $2.21 to $2.261 in cash and 0.192 Aussie Broadband shares for each Symbio share.
The offer contemplates that Symbio will pay a fully franked dividend prior to the scheme implementation of up to 35c per share, implying a release of franking credits of up to 15c per share, with any such dividend reducing the cash component of the offer.
This would push the value of the deal to between $3.10 and $3.15 per Symbio share, or a value of $266 million to $271 million.
In a statement to the ASX today, Symbio notes that there is ‘no certainty at this stage that any agreement will be reached or that a transaction will eventuate’.
The uncertainty is reflected in Symbio’s share price which was changing hands around Friday’s close of $2.82 in late morning trading today.
While the board has yet to make a recommendation on the non-binding offer, it affirms that it will not be extending the exclusivity period for Aussie Broadband beyond tomorrow’s agreed deadline.
Symbio was founded in Sydney by Rene Sugo and Andy Fung who predicted Voice over Internet Protocol (VoIP) would replace traditional cooper phone networks. Within six years of establishment, it listed on the ASX and completed its Australian network, helping to facilitate the entry of Skype and other VoIP pioneers into the market.
At its core, Symbio provides voice, messaging and cloud-based communication services to customers globally.
Superloop, a Brisbane-based internet service provider founded by Bevan Slattery in 2014, had sought a buyout of the company in a bid to create a 'leading telecommunications company with a compelling breadth of services and strengthened customer proposition'.
Aussie Broadband’s interest in Symbio is similarly aligned with a successful bid set to position the company as Australia's fourth-biggest internet provider.
The buyout follows the broadband company’s $344 acquisition early last year of Brisbane-based telecommunications and IT solutions provider Over The Wire.
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