Bidding war for telco Uniti sparked as Macquarie enters the fold with $3.4 billion bid

A Macquarie Asset Management fund has buddied up with the Public Sector Pension Investment Board (PSP Investments) to launch a competing bid for South Australian telecommunications company Uniti Group (ASX: UWL), valuing it at $3.4 billion.

The Macquarie Infrastructure and Real Assets Holdings and PSP Investments consortium’s bid of $5 per share trumps a previous takeover offer received by Uniti earlier this month from HRL Morrison & Co of $4.50 per security - which gave the telco a $3.08 billion valuation.

In a statement posted by Uniti today confirming media speculation about the consortium’s move, the company said its chairman received the latest non-binding, incomplete and indicative proposal yesterday afternoon via email.

Uniti said the ‘Connect Consortium’ proposal is subject to a number of conditions, including board approval, and is currently being considered by Uniti.

“The Board notes that it is uncertain that the Connect Consortium Indicative Proposal will result in an offer to Uniti shareholders,” UWL said.

“Uniti will continue to update shareholders, in accordance with the company’s continuous disclosure obligations.”

Shares in UWL rose modestly to a historic high on the announcement, up 1.18 per cent at the time of writing to $4.75 per share - higher than HRL Morrison & Co’s initial offer.

For UWL, the proposal comes after its achieved record half yearly results - announcing in February it generated $70.5 million in earnings over the six months to 31 December 2021 - up 140 per cent year-on-year. 

The company says its recurring revenue is now more than 90 per cent of total revenue ($109.5 in 1H22), and earnings would have been higher if construction on the east coast had not been delayed by COVID-19 lockdowns.

The company was co-founded in 2014 by Sasha Baranikov and Che Metcalfe, who were fired shortly after Uniti's 2019 initial public offering (IPO).