Vocus Group seems set to take on Morrison & Co in the fight for Australian telco Uniti.
On Monday, the ASX-listed Uniti confirmed it had received a A$3.1 billion buyout bid from Wellington-based Morrison & Co - the manager of Infratil, which has a half-share in Vodafone NZ, among otherassets.
Morrison & Co placed the bid on behalf of unnamed clients, reported to be a mix of super funds.
Now Vocus Group is set to launch a counterbid, according to The Australian newspaper.
Last year, Vocus Group was bought by Voyage Australia, a joint venture between Macquarie Group and Australia's largest superannuation fund, Aware Super. That deal included Voyage scooping up Vocus NZ - now rebranded as Orcon Group.
Voyage is currently in the process of buying 2degrees, and will merge its operations with Orcon (the deal has Commerce Commission approval but has yet to receive Overseas Investment Office or shareholder approval).
While the ownership jigsaw and commercial machinations are complex, the reason behind the burst of activity is simple: telco infrastructure assets are super hot right now.
Spark and Vodafone NZ are looking to jump on this trend. Both have hired bankers for the possible partial or full-sale of their cell tower networks.
If the Uniti deal goes ahead, it will be Morrison & Co's third Australian telco infrastructure play. In 2016, Infratil acquired a 48 per cent stake in Canberra Data Centres. And last year, Morrison & Co teamed with Australian super funds and the Future Fund to buy 49 per cent of Telstra's mobile towers business.
Industry speculation went wild when Morrison & Co's bid for Uniti was disclosed earlier this week. One theory went that if the Morrison & Co-led bid prevailed, Uniti would then turn its attention to this side of the Tasman, and bid for Vodafone NZ's cell tower assets and Orcon Group's fibre network. The probable Vocus bid puts a spanner in that theory.
From a standing start in 2019, Uniti has become the largest private fibre network operator in Australia via a series of acquisitions.
Its directors include former M2 and Vocus director Mick Simmons and M2 founder Vaughan Bowen. M2 bought NZ's CallPlus (now part of Orcon Group) for $200m in 2016, among a string of other deals. M2 went on to merge with Vocus Group, with Bowen becoming chairman of the combined operation in 2017. Bowen departed Vocus in 2017, but in 2021 was charged with insider trading related to an (ultimately unsuccessful) bid by private equity fund EQT to buy Vocus. In September, Uniti said it stood by Bowen, who would keep his position.
Bowen is fighting the charges and, by coincidence, had a preliminary hearing in the Melbourne Magistrates Court early this week, on the same day Uniti went into its trading halt. His full trial is not expected until later this year.
Uniti owns fibre and wireless networks that offer the only major private alternative to Australia's Government-owned and run National Broadband Network (NBN) - albeit with less coverage. Its operations are centred on cherry-picked areas of the east coast. Greenfield housing developments are a point of focus.
Last year, Uniti made a net profit of A$29.2m (from the year-ago A$15.9m) as revenue rose from A$58.2m to A$160.5m - with the jump driven by its acquisitions of fibre network builder OptiComm for A$694m and its A$140m purchase of Telstra's "Velocity" fibre-to-the-premise business.
Paul Newfield, who joined Morrison & Co in 2008, was named as the investment manager's new chief executive from the start of 2022. Photo / Supplied
Morrison & Co. made its A$3.1b bid on behalf of un-named funds for Uniti Group, an ASX-listed telecommunications infrastructure and services firm.
Uniti was placed in a trading halt on Tuesday afternoon with its shares at A$4.01, after the possible deal was leaked to Australian media.
In a later statement, the company confirmed it had received an indicative cash offer from Morrison & Co "on behalf of its managed funds and clients" of A$4.50 per share - for a valuation of A$3.1b.
Shares resumed trading after the statement, and closed on Wednesday at A$3.96.
Morrison & Co and Uniti are now in exclusive, non-binding talks until April 22 - although Uniti can talk to another party before then if it pays Morrison & Co a A$5m break fee.
Morrison's un-named clients in the deal are said to be a mix of Australian superannuation funds, plus the Australian Government's Future Fund.
Wellington-based Morrison & Co is best known as the manager of the ASX and NZX-listed Infratil (market cap $5.7b), which holds a half-share in Vodafone NZ. All up, it manages around $21.5b in infrastructure investments.
