A takeover offer for Opticomm (ASX:OPC) just sent Uniti’s (ASX:UWL) shares soaring

A takeover offer for Opticomm Ltd (ASX: OPC) has sent the share price of Uniti Group Ltd (ASX: UWL) soaring.

OptiComm is one of Australia’s largest open access, Fibre-to-the-Premises (FTTP) wholesale network infrastructure operators, servicing the new residential housing, apartment and commercial building markets.

Uniti is a diversified provider of telecommunications services. It’s a competitor to Opticomm.

Bidding war

It was announced on 15 June 2020 that Uniti was going to acquire Opticomm for a value of $5.20 per share, which included a fully franked special dividend of $0.10 per share.

On 8 September 2020 Opticomm announced it had received an offer from First State Superannuation. The non-binding offer was worth $5.85 per Opticomm share.

Last night, Uniti revised its binding offer to a value of $5.85 per share.

The new offer is for $4.835 cash per OptiComm share (including a fully franked special dividend of $0.10 per share) and 0.80537 Uniti shares per Opticomm share.

Will the offer be accepted?

At this stage, OptiComm hasn’t received a binding proposal from First State, so the Opticomm Board considers the revised Uniti offer to be superior.

Accordingly, Opticomm is continuing the process with Uniti.

On 25 September 2020 there is a Federal Court hearing scheduled to convene the postponed OptiComm scheme meeting, which is expected to take place on 13 October 2020 and the takeover is scheduled to occur on 30 October 2020.

Summary

Industry consolidation makes sense if Uniti can find synergies both on the cost and revenue side.

Investors clearly like this because according to CommSec, the Uniti share price is expected to rise 11.5% when trading occurs.

However, neither business is what I’d normally invest in. I prefer other ASX growth shares like Pushpay Holdings Ltd (ASX: PPH) or Bubs Australia Ltd (ASX: BUB).

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At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.

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