The battle for OptiComm appears to have reached a conclusion, with bidder Aware Super understood to be making an announcement on Friday to tell the market that it has bowed out of the two-way contest to buy the telecommunications company.
It paves the way for Aware Super’s competitor Uniti Group to buy the $677m listed business.
It is understood that Aware Super, previously called First State Super, has opted to walk away from the target because it did not believe the opportunity made sense at a higher price.
Shares in Uniti Group on Thursday closed 7.44 per cent higher at $1.30.
Aware Super came from left field to bid $5.85 a share for OptiComm in September after Uniti made the first offer at $5.10 a share in June.
A higher offer was then put forward by Uniti at $5.85 a share, before Aware Super fought back with a $6.50-a-share takeover bid with a minimum acceptance condition of 50.1 per cent.
Last month, Uniti Group improved on its earlier bids by offering $5.20 cash and 1.07 Uniti shares for each OptiComm share in a scheme of arrangement.
A shareholder meeting to vote on Uniti’s offer is being held on Friday. Last time around, Aware Super made its move just before the vote was due to occur.
OptiComm is Australia’s largest privately owned provider of fibre-to-the-premises network solutions. It provides internet infrastructure for some new developments that choose to install its fibre internet rather than the 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.
The major attraction for Uniti is OptiComm’s pipeline of contracts to connect new housing estates to the internet.
Many investors in Uniti also own shares in OptiComm and believe a merger makes sense.
The NBN has 85 per cent of the market, but following the takeover by Uniti of OptiComm the pair would collectively control the remaining 15 per cent.
Sources close to Uniti had earlier said that the company still had 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 additional costs involved with buying OptiComm were to be funded through a $40m increase in Uniti’s committed debt facilities and an additional 26 million Uniti shares to be issued to OptiComm shareholders.
The upsized $290m debt facility is with Westpac and CBA.
Uniti’s takeover via a scheme of arrangement will also be funded through existing cash on the balance sheet.
Aware Super has been advised by ICA Partners and Allens. Uniti is advised by Bank of America and Goldman Sachs.
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