Uniti Group "in discussions" on potential $3 billion acquisition by infrastructure investor Morrison & Co

Uniti Group has revealed it is in talks with infrastructure investor HRL Morrison & Co for a potential acquisition worth just over $3 billion.

In an ASX announcement to address a report from The Australian Financial Review’s Street Talk column published on Tuesday morning, Uniti said it “has entered exclusive discussions” with Morrison & Co, but are also “non-binding, preliminary, highly conditional and uncertain as to an outcome”.

Uniti said Morrison & Co’s proposal has an indicative price of $4.50 cash per share, valuing the company at $3.1 billion based on its issued 687,962,649 shares.

The proposal has an exclusivity period of up to 22 April this year and is also subject to a number of conditions, including due diligence, unanimous approval from Uniti’s board, a mutually acceptable scheme implementation agreement and more.

“Uniti will update shareholders, in accordance with the company's continuous disclosure obligations, in due course,” the ASX announcement read. “In the meantime, Uniti shareholders should not take any action in relation to the indicative proposal.”

Morrison & Co last year was involved in Telstra’s $2.8 billion sale of 49 percent of its telecommunications towers business, InfraCo Towers (now called Amplitel), to Australia's sovereign wealth fund Future Fund and super funds Commonwealth Superannuation Corporation and Sunsuper. Morrison & Co managed the deal.

South Australia-based Uniti Group debuted in the ASX in 2019 as “Uniti Wireless”, which at the time was a fixed wireless broadband company that also resold NBN services.

Following a number of acquisitions like fibre broadband builder OptiComm, and Telstra’s fibre-to-the-premises business Velocity, Uniti has since expanded into three separate business units: wholesale and infrastructure, communications platform-as-a-service and consumer and business.

Last month, Uniti reported revenue and profit growth in the first half of the 2022 financial year, crediting its deployment of fibre-to-the-premises (FTTP) networks ramped up throughout the calendar year 2021, as well as deals with a number of multi-dwelling apartments.