Aware Super is understood to be in the market in search for financing banks, in what some believe is a signal it is likely to soon lob another bid for OptiComm.
Uniti Group lifted its offer for OptiComm this month to $5.20 cash and 1.07 Uniti shares for each OptiComm share, taking the value of its bid in late Thursday trade to $6.56 a share or $683m.
The move was a response to a $6.50 per share takeover bid put forward by Aware Super.
Aware Super had trumped an earlier $5.85 per share offer by Uniti, as a bidding war emerged for the company.
OptiComm’s shares were at $6.70 on Thursday, taking its market value to $697.30.
OptiComm provides internet fibre-to-the-premises network solutions.
DataRoom understands that other superannuation funds have also been circling OptiComm of late, weighing up whether to put forward an offer.
However, the view now is that the price for the company is too high for others to wade into the contest.
Many investors in Uniti also own shares in OptiComm and believe that a merger makes sense.
Sources close to Uniti say the company still has plenty of fire power left to fight Aware Super for control of OptiComm, with debt levels at 2.5 times its earnings and the prospect of a significant boost to earnings for the newly merged business.
The major attraction is OptiComm’s pipeline of contracts to connect new housing estates to the internet — more than double what is currently contracted — and with scope to grow.
The NBN has 85 per cent of the market.
Following a takeover of OptiComm by Uniti, the pair would collectively control the remaining 15 per cent.
OptiComm provides internet infrastructure for some new developments that choose to install its solution rather than NBN, and is considered “core-plus” infrastructure by some infrastructure funds.
Uniti is an internet infrastructure and service provider that has so far focused largely on the apartment market.
Another OptiComm drawcard is that agreements currently compel Telstra to only buy NBN wholesale services for suburbs, but they will soon expire.
This creates the option for Telstra to use other internet service providers like OptiComm.
However, jitters are starting to emerge among some Uniti investors that the company may pay too much for the target. Uniti already has its foot on 19.5 per cent of OptiComm’s shares through ownership and call options, but Aware Super is only seeking minimum acceptance of 50.1 per cent.
Aware Super is keen on buying OptiComm for its steady revenue stream, whereas Uniti, a competitor, is under pressure to consolidate in the market, given that it now faces competition from the NBN.
Leading Uniti are former executives of the M2 telecommunications business, including chief executive Michael Simmons, Vaughan Bowen, who is executive director and Ashe-lee Jegathesan, who is the chief operating officer.
M2, which was acquired by Vocus Group, grew by acquisition, and one of the criticisms of the company is that the businesses were not integrated, with it at one stage having 27 billing systems.
Like M2, Uniti has also grown into a $600m company through acquisitions.
One market expert says that in three years, Uniti will prove not to have overpaid for the business because of the operating cost savings.
Some believe the plan is to sell off the company to someone like AGL after it has grown in scale.
Aware Super is advised by ICA Partners and Allens, while Uniti is advised by Bank of America and Goldman Sachs.
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