Uniti Group bidder Morrison & Co matches rival $3.4 billion acquisition bid

The bidding war for telco infrastructure company Uniti Group is heating up after investment company HRL Morrison & Co has matched the offer of $5 per share or $3.4 billion made by rival bidder The Connect Consortium.

In Uniti’s ASX announcement, the company said it was in “its best interests” of Uniti shareholders to engage with the Morrison/Brookfield Consortium and plans to end talks with Connect Consortium after matching the bid.

Morrison & Co has also recruited Canada-headquartered Brookfield Asset Management last week to form a consortium as a 50/50 partner.

Connect Consortium, which comprises Australian investment firm Macquarie Infrastructure and Real Assets (MIRA) Holdings and Public Sector Pension Investment Board (PSP Investments), first offered to acquire Uniti for $3.4 billion on 24 March.

In comparison, Morrison & Co’s initial offer on 14 March to acquire the company was for just over $3 billion or $4.50 per share.

“After careful consideration of both proposals, the board has determined it is in the best interests of Uniti shareholders to engage with the Morrison/Brookfield Consortium on their Revised Morrison/Brookfield Consortium Indicative Proposal," Uniti told shareholders this morning.

"The board has also determined it is not able to engage with the Connect Consortium on the Connect Consortium Indicative Proposal at this time.

“Uniti shareholders do not need to take any action in relation to the Revised Morrison/Brookfield Consortium Indicative Proposal or the Connect Consortium Indicative Proposal. The Board notes there is no certainty that either proposal will result in any transaction being put to Uniti shareholders for their consideration.”

Uniti said the inclusion of Brookfield as a 50/50 partner will have terms and conditions that would be generally the same as Morrison & Co’s indicative proposal.

“The Morrison/Brookfield Consortium has also advised Uniti that they have made significant progress in relation to both their diligence program and engagement with lenders, and that they have not identified anything that would indicate that they will not be able to enter into a binding Scheme Implementation Agreement (SIA) with Uniti,” the announcement read.

Uniti added that as a condition of the updated proposal, the consortium requires the company to not further engage with Connect Consortium or grant its rivals the ability to undertake due diligence investigations.

“The Morrison/Brookfield Consortium is particularly concerned at the prospect that the Connect Consortium may receive access to competitively sensitive information of Uniti, given that Macquarie Infrastructure and Real Assets Holdings Pty Limited (MAM) is a member of the Connect Consortium and an affiliated fund of MAM holds a 50 percent ownership interest in Vocus Group Limited, a competitor of Uniti,” Uniti said.

The new proposal also wants Uniti to not engage with another prospective buyer within a four week period even if they offer a superior proposal.

Uniti Group, which owns fibre broadband builders OptiComm and LBNCo, as well as Telstra’s former fibre-to-the-premises business Velocity, specialises in wholesale telco services, infrastructure, communications platform-as-a-service and consumer and business telco services.