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The bidding war is heating up for Hawaiian Telcom’s parent company.
Just one business day after Cincinnati Bell announced it had received a sweetened all-cash offer of $12.50 a share from Toronto-based Brookfield Infrastructure, Macquarie Infrastructure and Real Assets Inc. on Monday increased their all-cash bid to $13.50 a share.
Both Brookfield and Macquarie/Real Assets have now made two offers each for Cincinnati Bell.
Investors, apparently thinking there may be more offers to come, sent Cincinnati Bell’s stock price soaring Monday by 14%, or $1.83, to $14.88. That is 10.2% above the latest offer price.
Cincinnati Bell said it will “carefully review and evaluate” the unsolicited binding acquisition proposal to determine the course of action that is in the best interests of the company and its stakeholders. But Cincinnati Bell also added that “the Brookfield merger agreement remains in effect and the Cincinnati Bell Board has not changed its existing recommendation in support of the transaction with Brookfield.”
If Cincinnati Bell ends up opting for the Macquare/Real Assets
offer, it would be required to
pay Brookfield a breakup fee of $21.39 million.
Cincinnati Bell acquired Hawaiian Telcom in July 2018 for
$650 million in stock and cash, making Hawaiian Telcom shareholders new owners of Cincinnati Bell stock. At the time the Hawaiian Telcom deal closed, Cincinnati Bell’s stock was trading at $15.70 a share. The shares later plunged to $7.72 before Brookfield made its first all-cash offer of $10.50 a share in December. In January, Macquarie/Real Assets made an unsolicited offer for $12 a share. Brookfield followed Thursday with an offer of $12.50 a share that was announced Friday.
Hawaiian Telcom, which has about 1,200 employees, has been heavily investing in its fiber-optic network to provide high-speed
internet as well as video services through Hawaiian Telcom TV.