The Uniti Group Ltd (ASX: UWL) share price rocketed higher in early trade before being quickly placed into a trading halt.
The telco’s shares were up 17% to $3.69 prior to the pause in trading.
Why did the Uniti share price rocket higher?
Today’s rapid rise by the Uniti share price appears to have been driven by speculation that the company is in takeover talks.
However, on this occasion, the would-be suitor is rumoured not to be Vocus, which was taken private last year by Macquarie Infrastructure and Real Assets (MIRA) and Aware Super.
There was speculation that Uniti and Vocus were in talks regarding a takeover last month, but nothing eventuated. Though, this speculation appears to have prompted an unknown third-party to the table this week.
According to the Australian, Uniti is understood to have entered into exclusive talks with a party for a potential sale. The report suggests that the suitor has put forward an offer of between $4.00 and $5.00 per share. This compares to the 52-week high of Uniti share price of $4.69.
The report suggests that Canadian private equity firm Brookfield could be the party in question. Particularly given its recent penchant for Australian assets.
It recently acquired electricity company AusNet, bought a stake in Intellihub, snapped up La Trobe Financial, and made a play for AGL Energy Limited (ASX: AGL) with Mike Cannon-Brookes.
In addition, EQT has been touted as a potential buyer of Uniti, along with Kohlberg Kravis Roberts (KKR). The latter has just raised US$17bn for a new infrastructure fund, giving it plenty of firepower.
What’s next?
Uniti has requested a trading halt until tomorrow morning but has neither confirmed nor denied the speculation.
It stated that the trading halt was requested: “To enable an orderly release of information regarding an announcement in response to media speculation.”
Though, given how quickly an announcement could be made to refute speculation, it appears that this could prove to be more than just rumours. Stay tuned for that.
The post Why the Uniti (ASX:UWL) share price jumped 17% before being halted appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Uniti Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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