Uniti ups bid for OptiComm, takes stake

Street Talk

Uniti Group has taken a 19.5 per cent stake in OptiComm and increased its takeover offer to $5.85 a share.

It is understood Uniti has made a revised $4.835 a share cash plus scrip bid, to get to $5.85 a share, and match the $600 million offer by First State Super.

Back in black: Vaughan Bowen’s Uniti Group has its nose back in front in a $600 million battle for OptiComm.  AFR

The stake, secured by call options and shares from OptiComm institutional shareholders in the past few days, also makes it hard for First State to buy OptiComm via a scheme of arrangement.

The increased cash component of its bid would be funded by debt provided by Commonwealth Bank of Australia and Westpac.

Uniti’s decision to match the offer and, more importantly, secure the stake, is a big move by Vaughan Bowen and his team to get Uniti back in front in what has turned into a hotly contested $600 million takeover battle for the broadband networks company.

All appeared lost for Uniti last week when First State, a $130 billion asset manager, made an all cash offer at $5.85 a share that blew Uniti’s cash and scrip deal out of the water. First State had until Friday to shore up its bid, and had its bankers and lawyers finalising due diligence.

Uniti will also hope that its new bid will see its own share price rise rapidly, making its $5.85 a share cash and scrip bid worth even more.

It is understood Uniti had its bankers at Bank of America talking to fund managers in recent days to secure the OptiComm stake which includes call options over 13.5 per cent of the company and a 6 per cent direct interest.

The options give Uniti the right to purchase OptiComm shares for the same cash and scrip consideration under the improved scheme, and will expire in six months.

If First State returns with a higher offer and it is recommended by OptiComm, then Uniti can exercise the option and own the 19.5 per cent block stake outright.

The revised bid and stake is expected to be announced on Tuesday morning.

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Sarah Thompson has co-edited Street Talk since 2009, specialising in private equity, investment banking, M&A and equity capital markets stories. Prior to that, she spent 10 years in London as a markets and M&A reporter at Bloomberg and Dow Jones. Email Sarah at sarah.thompson@afr.com
Anthony Macdonald co-edits Street Talk, specialising in private equity, investment banking, M&A and equity capital markets. He has 10 years’ experience as a business journalist and worked at PwC, auditing and advising financial services companies. Connect with Anthony on Twitter. Email Anthony at a.macdonald@afr.com

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