5G Networks announces takeover bid for AUCyber

5G Networks today announced its unsolicited takeover bid for AUCyber, following news from AUCyber that its trading performance had been below expectations and that its CEO Peter Maloney had resigned.

5GN is looking to buy all fully paid ordinary AUCyber shares for 11 cents cash per share. It said there were 163,563,360 AUCyber shares on issue – it recently acquired a 10.74% stake.

The offer closes on 6 February 2025, unless otherwise extended.

The AUCyber board announced today it was “in the early stages of evaluating the offer” and advised shareholders to take no action. It plans to respond to shareholders in the coming weeks.

AUCyber also announced today that it had terminated the employment of its CEO Peter Maloney, following Maloney’s resignation as Managing Director and CEO on December 4.

Maloney has resigned his directorships of the company and its subsidiaries, whilst “continuing to make himself available to the board and its delegates until 31 March 2025,” according to today’s announcement by AUCyber.

AUCyber chair Cathie Reid will assume the caretaker role of executive chair.

Trading performance “below expectations”

Today’s takeover news follows AUCyber’s announcement on December 4, 2024, that its trading performance had been below expectations and it did not expect to meet its FY25 revenue guidance.

AUCyber’s unaudited revenues for the four months from 1 July to 31 October 2024 were approximately 29 percent below the company’s FY25 budget. It reported unaudited revenue of $8.3 million for the four months to 31 October 2024, and an unaudited underlying EBITDA loss of $1.3 million for the same period.

The company had cash of $5.7 million at 31 October 2024, and no drawn debt, it stated on December 4.

It did not expect to meet its FY25 guidance for revenue of $36.6 million and underlying EBITDA of $4.7 million.

“In light of the company’s YTD performance and the resignation of the CEO, the board has determined to withdraw the FY25 guidance,” it announced.

AUCyber was previously named Sovereign Cloud Holdings, or AUCloud. On April 30, 2024, AUCloud finalised the acquisitions of PCG Cyber, Venn IT Solutions and Arado. A July 2024 operational update stated that the company invested $18.758 million in the acquisitions in the fourth quarter of FY24.

In August 2024, AUCloud announced it had opened an office in Brisbane. At that time, it reported its team included 100 cyber security experts across Brisbane, Sydney, Canberra, Melbourne and Adelaide.

The December 4 announcement stated that revenues in AUCyber’s cyber security, cloud solutions and managed services businesses had “fallen short of expectations”.

This was “principally due to slower than expected new customer uptake during the period of integration, in addition to recent customer churn.”

On December 4 the company stated that non-executive directors were conducting further investigation of the company’s operations and the company would provide the market with a further trading update as part of the release of its 1H FY25 results in late February 2025.

The December 4 announcement stated that the AUCyber board intended to engage an executive search firm to evaluate internal and external candidates for the role of CEO.