A Macquarie (ASX: MQG) fund's attempt to acquire another telecommunications company for $3.4 billion has today been rebuffed by target Uniti Group (ASX: UWL), after rival suitor HRL Morrison & Co lifted its bid and raised concerns that the Vocus part owner would get access to "sensitive information" if it got a look at UWL's books.
Initial suitor HRL Morrison & Co today brought Brookfield Infrastructure Group on as a consortium partner and raised its bid by 50 cents per share - matching that put forward by the Macquarie consortium of $5 per UWL share.
In an ASX update, Adelaide-based Uniti says the Morrison/Brookfield Consortium bid is essentially the same as Morrison & Co’s original bid, just with an increase in price and a condition that Uniti does not further engage with the Connect Consortium, which comprises Macquarie Infrastructure and Real Assets Holdings as well as the Public Sector Pension Investment Board.
According to Uniti, the Morrison/Brookfield Consortium is concerned that if the rival suitor is granted an opportunity to conduct due diligence, it may gain access to confidential and sensitive information, notably because of the Macquarie funds’ 50 per cent stake in competitor telco Vocus.
“The Morrison/Brookfield Consortium is particularly concerned at the prospect that the Connect Consortium may receive access to competitively sensitive information of Uniti, given that Macquarie Infrastructure and Real Assets Holdings Pty Limited is a member of the Connect Consortium and an affiliated fund of MAM holds a 50 per cent ownership interest in Vocus Group Limited, a competitor of Uniti,” UWL said.
Uniti has therefore decided to no longer engage with the Connect Consortium as a condition of that agreement means the telco has to share the same due diligence materials made available to the Morrison/Brookfield Consortium with Connect, “which is clearly incompatible” according to Uniti.
“After careful consideration of both proposals, the Board has determined it is in the best interests of Uniti shareholders to engage with the Morrison/Brookfield Consortium on their revised Morrison/Brookfield Consortium indicative proposal,” UWL said.
“The board has also determined it is not able to engage with the Connect Consortium on the Connect Consortium indicative proposal at this time.”
Shareholders have been told they do not need to take any action, and Uniti notes there is no certainty that either proposal will result in any transaction being put to shareholders for their consideration.
For Brookfield, the play is the asset manager's latest after teaming up with Australian billionaire Mike Cannon-Brookes on two failed proposals to take over energy giant AGL (ASX: AGL).
Unlike that move, Brookfield was successful in recently acquiring electricity infrastructure company AusNet for $18 billion, and purchasing aged care services provider Aveo for $1.3 billion in 2019.
Shares in UWL are up 1.27 per cent to $4.78 per share at 10.33am AEDT.
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