The Uniti Group Ltd (ASX: UWL) share price is in the red after the company abandoned Macquarie Group Ltd (ASX: MQG)'s takeover offer in favour of Morrison and Co's increased bid.
ASX investment banking giant, Macquarie has reportedly put its pens back on the table in response to the accepted $5 per share bid – complete with updated terms – put forward by Morrison & Co and its recently enfolded bidding partner, Brookfield.
But, as Macquarie is backing away from the proposal, another broker is reportedly predicting a bidding war for the telecommunications infrastructure company.
At the time of writing, the Uniti share price is $4.65, 1.38% lower than its previous close.
Let's take a closer look at Macquarie's reported exit from the battle for Uniti and who could take its place.
Uniti share price slips as Macquarie reportedly surrenders
The Uniti share price has dipped into the red this afternoon amid reporting by The Australian and the Australian Financial Review claiming that Macquarie will step back from its recent bid for the telco.
Macquarie's Macquarie Infrastructure and Real Assets Holdings (MIRA) teamed up with Canadian fund Public Sector Pension Investment to lob a $5 per share takeover bid for Uniti last week.
In doing so, the pair – dubbed the 'Connect Consortium' – outbid Morrison & Co's previous offer by 50 cents per share.
In response, Morrison & Co teamed up with Brookfield. They lobbed their own $5 per share bid today. The newly sweetened offer is conditional on Uniti ending engagement with the Connect Consortium and its proposal.
The bidders were wary Macquarie might be allowed access to "competitively sensitive information" during due diligence. That fear was stoked by MIRA's stake in Uniti's competitor, Vocus Group.
Additionally, Morrison & Co entered 4 weeks of exclusive due diligence before the Connect Consortium lobbed its bid. However, the latter's proposal was also conditional on 4 weeks of its own due diligence. During that period, Uniti would be unable to accept a rival bid.
Thus, the company decided the bids were "clearly incompatible". As a result, Uniti's board accepted Morrison & Co and Brookfield's latest takeover bid, seemingly leaving Macquarie out on the street.
Though, the investment bank doesn't appear too phased. Sources in the know reportedly told The Australian it's "pens down" for the Connect Consortium for now.
Is a bidding war still on the cards?
As The Motley Fool Australia recently reported, JP Morgan and Bell Potter both predicted that a bidding war to acquire Uniti could break out last week.
Today, Shaw & Partners has reportedly thrown bets on the same horse. Shaw & Partners broker James Nicolaou has been quoted by The Australian as saying more bidders will likely come for the telco.
The broker was quoted as saying Uniti is currently "[Australia's] highest quality growth infrastructure asset" and could draw the attention of Aware Super.
Aware Super – formerly named First State Super – unsuccessfully bid against Uniti in the battle to takeover Opticomm in 2020.
"Aware Super showed a huge desire via that bidding war, that involved several bids and due diligence, that they want to own a quality long term annuity infrastructure business," said Nicalaou.
"They also have an intimate knowledge of the business from that last process."
Previously, JP Morgan reportedly stated Uniti's shares could bring about a price of $7 apiece.
