The Uniti Group Ltd (ASX: UWL) board is said to be considering a proposal put forward by Macquarie Infrastructure and Real Assets Holdings Pty Limited (MIRA) and Public Sector Pension Investment (PSPI) board to buy the company.
Collectively, the pair have labelled themselves "Connect Consortium". MIRA operates within Macquarie Asset Management's Real Assets division, itself a segment of Australian investment bank Macquarie Group Ltd (ASX: MQG).
At this point in time, Uniti shares are frozen due to the media speculation on the deal and the sensitive nature of the announcement(s).
Before it went into the chiller yesterday, the Uniti share price was fetching $4.67 apiece, having climbed 18% in the five days leading to Wednesday.
Uniti considering Macquarie offer
Uniti confirmed that it had received the offer that proposes an all-cash $5 per share buyout of the company. It says the proposal is non-binding, incomplete and indicative, and that there's no certainty a deal will result.
The plan Macquarie set out values Uniti at roughly $3.4 billion and represents a 7% premium to the company's last quoted market capitalisation before entering the halt.
However, in these kinds of transactions, we need to also look at the company's balance sheet, by subtracting cash and equivalents, and then adding in minority interest and total debt to calculate the company's enterprise value (EV).
At the time of writing, Uniti has an EV of $3.39 billion according to Bloomberg data, hence the deal values Uniti at 'fair price'. EV is the figure investment bankers use when analysing buyouts because it signifies what the company's true market value is.
Not only that, but Uniti had already entered into exclusive discussions with HRL Morrison & Co. for $4.50 per share just last week.
That deal is also subject to intense scrutiny and has a number of milestones to get through in order to overtake Macquarie's fresh offer.
As such, Macquarie's offer is around 11% higher than Morrison & Co's bid, according to Bloomerg data.
Regarding the deal, Uniti said:
The Connect Consortium Indicative Proposal is subject to a number of conditions, including satisfactory completion of due diligence, FIRB approval, no material adverse change in respect of Uniti, committed debt funding being in place, receipt of internal MAM Real Assets and PSP Investments final approvals, unanimous recommendation of the transaction from the Uniti Board, and entry into a mutually acceptable Scheme Implementation Agreement to be agreed between Uniti and the Connect Consortium.
The board notes that Uniti shareholders needn't take any action at this stage and that it will regularly update the market on any progress.
Uniti share price snapshot
In the past 12 months, the Uniti share price has more than doubled and it has now climbed another 5% this year to date in line with the performance of the broad tech sector.
Over the past month, shares are soaring higher and are now up 45% in that time after an 18% gain in the previous week of trade.
