The Uniti Group Ltd (ASX: UWL) share price is surging higher today after announcing an improved offer to acquire fellow telco OptiComm Ltd (ASX: OPC).
This follows the announcement of a competing offer by First State Super last week valuing OptiComm at $5.85 per share.
At the time of writing the Uniti share price is up 13% to $1.38.
What has Uniti offered?
This morning Uniti revealed that it has now increased its offer to $4.835 cash per share and 0.80537 Uniti shares per share from $5.20 per share. This implies a value of $5.85 per share, which matches First State Super's offer.
This offer will be funded via existing cash reserves, an upsized $250 million new debt facility, and 84 million Uniti shares.
Despite the increased price tag, management notes that the acquisition remains highly earnings accretive. It estimates earnings accretion of ~20% on a combined proforma FY 2020 basis, including cost synergies. It also believes it will create the pre‐eminent challenger in national private fibre networks.
What now?
OptiComm appears happy with this offer and has entered into an amended and restated scheme implementation deed with Uniti, which is being recommended by the OptiComm board.
Uniti notes that it has already secured a 19.5% relevant interest in OptiComm through commitments from a number of OptiComm institutional shareholders, comprising call option agreements and share purchase agreements.
It believes this relevant interest is highly strategic for Uniti, placing it in a considerably strengthened position to successfully complete the acquisition this time around.
Uniti CEO & Managing Director, Michael Simmons, commented: "It is by now well understood that the combination of the Uniti and OptiComm businesses is both highly strategic and synergistic. We have been very thoughtful in preparing our revised offer, to ensure we have the best opportunity to secure the company we have sought to own for some time."
"To this end, the nearly 20% relevant interest we have secured in OptiComm delivers us a significant strategic stake in OptiComm. We are excited and ready to complete the OptiComm acquisition over the coming weeks and to welcome the OptiComm team as part of the Uniti Group. I am more confident than ever of being able to realise the many benefits inherent in the Acquisition and to taking up our position as the pre‐eminent challenger in the private fibre market," he concluded.
All eyes will be on First State Super to see if it comes back with an improved offer of its own in the coming days.
