Join our daily newsletter At The Bell to receive exclusive market insights
- Broadband provider Uniti (UWL) is prepared to saddle extra debt and sweeten its acquisition offer to outbid a new competitor for telco stalwart OptiComm (OPC)
- Uniti’s new-and-improved deal comes as Aware Super — formerly First State Superannuation — sparked a bidding war last month after tabling a higher offer
- Back in September, Aware countered Uniti’s $532 million bid, offering $5.85 for every OptiComm share, raising the telco’s implied value to $606 million
- But Uniti hit back at the unsolicited bid, matching the offer in mid-September
- Now, the ASX-lister has raised the stakes: it wants to buy OptiComm for $6.67 per share, upping its implied value to just shy of $700 million
- To support the offer, Uniti needs to add an extra $40 million to its debt and issue 26 million more shares
- Overall, current Uniti investors will see their holding dilute by around 17.5 per cent
- Following today’s update, Uniti shares fell 5.84 per cent, worth $1.29
- Meanwhile, OptiComm stock rose 2.15 per cent to hit $6.66 at market close
Broadband provider Uniti (UWL) is prepared to saddle extra debt and sweeten its acquisition offer to outbid a new competitor for telco stalwart OptiComm (OPC).
Uniti’s new-and-improved deal comes as Aware Super — formerly First State Superannuation — sparked a bidding war last month after tabling a higher offer.
Back in September, Aware countered Uniti’s original $532 million bid, offering $5.85 for every OptiComm share and raising the telco’s implied value to $606 million.
Uniti hit back at the unsolicited bid, matching the offer in mid-September in an effort to keep some skin in the game. And while Aware Super’s offer was a premium on Uniti’s original bet, OptiComm’s board still recommended the broadband provider’s bid to its shareholders.
Today, Uniti has once again raised the stakes and brought a new deal to the table.
New and improved
Under the refreshed bid, the telco up-and-comer wants to buy OptiComm for $6.67 per share, upping its implied value to just shy of $700 million.
Breaking that figure down, Uniti wants to pay $5.20 in cash and 1.07 Uniti shares for every OptiComm share on offer. The telco’s cash consideration could go down if it opts to include a 10-cent-per-share dividend in the deal.
All up, the revised offer is a 2.6 per cent premium to what Aware Super has tabled.
But with nearly $170 million added to Uniti’s original deal, the ASX-listed broadband provider needs to head back to the banks for extra funding.
Extra cash
Back in June, Uniti tapped investors for $270 million to support the OptiComm buy. The oversubscribed raise, combined with a $250 million facility supported by two of Australia’s major banks, provided a much-needed cash injection to fuel the buy.
To fund its increased bid, Uniti will add an extra $40 million to its debt facility, while an extra 26 million UWL shares will hit OtpiComm holder’s pockets. Ultimately, if its latest offer proves successful, Uniti investors will see their holding dilute by around 17.5 per cent.
Following the buy, Uniti should have around $70 million in the bank to support its future operations.
Positively, OptiComm’s directors have already backed the updated offer and told its shareholders to approve the scheme, as long as a better offer doesn’t come along.
Following today’s update, Uniti shares fell 5.84 per cent, worth $1.29 at market close. Meanwhile, OptiComm stock rose 2.15 per cent to hit $6.66.
