Uniti matches Aware Super’s OptiComm bid

OptiComm is Australia’s largest privately-owned provider of fibre-to-the-premises network solutions.

Uniti Group is steeling itself for a prolonged battle to gain control of its rival OptiComm after it took up its right to match a $6.50 per share takeover offer by Aware Super lobbed on Monday.

The move was highly anticipated, as flagged by DataRoom on Thursday, and now sees Uniti with its nose in front in the contest, offering $6.67 per share, although in cash and scrip.

Uniti had three days to match an earlier full cash offer by Aware Super, which expired on Thursday.

The offer by Aware Super, formerly First State Super, valued the company at $645m and trumped a $5.85-a-share bid by Uniti.

Sources close to Uniti say 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 signifcant 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, but following the takeover by Uniti of OptiComm, the pair would collectively control the remaining 15 per cent.

The latest Uniti offer will see OptiComm shareholders offered $5.20 cash, less a 10c dividend if declared, and 1.07 Uniti shares for each OptiComm share.

The additional costs involved with buying OptiComm will 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 and Uniti shareholders will own about 82.5 per cent of the combined group following the proposed deal.

The company already owns a 6 per cent interest in OptiComm shares and has entered into call option agreements to buy an additional 13.5 per cent.

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 OptiComm rather than NBN and is considered “core-plus” infrastructure by some infrastructure funds.

Uniti is an internet infrastructure and service provider.

Aware Super, which has a takeover bid on the table with a minimum acceptance condition of 50.1 per cent, 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.

Aware Super is advised by ICA Partners and Allens, while Uniti is advised by Bank of America and Goldman Sachs.

Uniti Group shares closed down 6.2 per cent to $1.28 while shares in OptiComm closed 2.15 per cent higher to $6.66.