Brookfield Infrastructure Partners LP’s US$2.6-billion takeover of Cincinnati Bell Inc. may not proceed, after the U.S. telecom company announced on Friday that it has received a “superior company proposal” from Macquarie Infrastructure and Real Assets Inc.
The two prospective buyers have been in a bidding war over Cincinnati Bell, a fibre-optic network provider, since January.
Brookfield Infrastructure, an affiliate of Toronto-based Brookfield Asset Management Corp., announced its intention to buy Cincinnati Bell on Dec. 23, in a deal pricing the telecom company’s shares at US$10.50 each.
Macquarie Infrastructure, a division of Australia’s Macquarie Group Ltd., came in with an unsolicited bid in January at US$12 a share.
The bidding war heated up over the past week, with a flurry of offers and counteroffers. Macquarie eventually arrived at US$15.50 a share on Thursday, which Cincinnati Bell declared a “superior company proposal." The telecom company announced on Friday its intention to terminate its earlier agreement with Brookfield.
Brookfield now has until midnight on March 12 to come back with a superior offer.
“Cincinnati Bell will negotiate in good faith with Brookfield during this period, and the Cincinnati Bell board will consider in good faith any changes to the Brookfield merger agreement that Brookfield may propose during this period,” the company said in a statement.
Cincinnati Bell runs a fibre-optic network in its home city of Cincinnati and in Hawaii, servicing more than 1.3 million homes. It also offers services in Indiana and Kentucky.
At the time the deal was announced, Brookfield Infrastructure chief executive officer Sam Pollock said the acquisition would be "a great addition to our data infrastructure portfolio and we expect it will contribute strong utility-like cash flows with predictable growth.”
Brookfield is being advised in the negotiations by New York law firm White & Case LLP and backed by a syndicate of banks including Bank of America, BMO Capital Markets Corp., Citigroup Global Markets Inc., TD Securities and Wells Fargo Securities, LLC.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.