First State Super is expected to storm back into the competition to buy OptiComm after Uniti Group upped its offer for the telecommunication services provider.
Uniti said in a statement to the market that it had increased its cash and scrip bid to a price equating to $5.85 per share, comprising $4.835 per share cash and Uniti shares for each OptiComm share.
The OptiComm board is recommending the latest offer that matches the value of the earlier offer from First State.
Uniti has also secured a 19.5 per cent interest in OptiComm shares through commitments from a number of OptiComm institutional shareholders, comprising call option agreements and share purchase agreements.
It comes after the $90bn superannuation fund made a $609m takeover bid for the group a week ago, trumping Uniti’s earlier offer.
FirstState’s $5.85 per share bid is not yet binding and subject to due diligence.
Earlier, OptiComm had agreed to complete a scheme of arrangement with Uniti, which was offering $5.10 a share for the company, equating to $530m, or $540m of cash and scrip, factoring in a dividend payment.
OptiComm provides internet connection services to property developers and retail service providers and is considered “core-plus” infrastructure by some infrastructure funds.
The company is one of few in the telecommunications space that has caught the eye of a superannuation fund bidder, likely to have a cheaper cost of capital than a strategic player in the telco space.
It listed last year with a $208.2m market value, with shares being sold at $2 each. Existing founders, including director David Redfern and Paul Cross, still own about 40 per cent.
Uniti maintains that the proposed acquisition is highly earnings accretive at about 20 per cent on a combined proforma 2020 financial year basis including cost synergies.
However, some question whether $10m of cost synergies exist with the deal.
OptiComm customers are also said to be focused on whether the Australian Competition and Consumer Commission could put a Uniti and OptiComm tie up under scrutiny.
Shares in OptiComm were up almost 5 per cent in afternoon trade to about $5.97 as investors bet a bidding war will emerge.
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