Cincinnati Bell Inc. (NYSE: CBB), which enjoyed the fruits of a bidding war between a pair of investment firms, has confirmed Macquarie Infrastructure and Real Assets Inc. (MIRA) will end up the service provider’s new owner. Suitor Brookfield Infrastructure (NYSE: BIP; TSX: BIP.UN), which had gone as far as reaching a purchase agreement with Cincinnati Bell, declined to match MIRA’s final bid of $15.50 per share in cash for all outstanding shares of Cincinnati Bell common stock. The transaction likely is worth slightly more than $3 billion.
Brookfield originally reached an agreement to acquire Cincinnati Bell in December 2019 for $10.50 per share (see “Brookfield Infrastructure to buy Cincinnati Bell for $2.6 billion”). However, another bidder emerged (unidentified at the time, but likely MIRA) with a non-binding offer of $12.50 per share, which Brookfield matched (see “New agreement sees Brookfield Infrastructure paying more for Cincinnati Bell, but better bid surfaces”). Undaunted, MIRA up its bid to $13.50, then $14.50, with Brookfield stepping up each time. Apparently, $14.50 per share was as high as Brookfield was willing to go. The $15.50 per share price is approximately twice the closing $7.72 per share price on December 20, 2019, the last trading day prior to the original merger agreement with Brookfield.
Cincinnati Bell had anticipated a merger with Brookfield would close by the end of this year. It has not released an expected timetable for the new transaction. The final merger agreement with Brookfield carried a provision that would have Cincinnati Bell pay a breakup fee of $24.8 million “in certain circumstances.” The service provider did not disclose whether payment of the breakup fee would be required in the current circumstances.
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