Uniti : enters into binding Scheme Implementation Deed

ASX Announcement (UWL)

UWL enters into Scheme Implementation Deed with Morrison / Brookfield Consortium

14 April 2022: Uniti Group Limited (Uniti or Company) (ASX:UWL) announces that it has entered into a scheme implementation deed (SID) with MBC BidCo Pty Ltd (MBC), an entity wholly owned by a consortium comprising The Morrison & Co Infrastructure Partnership, Commonwealth Superannuation Corporation and Brookfield Australia (together, the Morrison/Brookfield Consortium) to acquire 100% of Uniti by way of a scheme of arrangement (Scheme) for cash consideration of $5.00 per Uniti share less the value of any dividends or distributions declared or paid after today.

Key Highlights

• • The cash price of $5.00 per Uniti share implies an equity value, on a 100% fully diluted basis, of approximately $3.62 billion and an enterprise value of approximately $3.73 billion1, and represents:

  • o a 58.7% premium to Uniti's undisturbed closing share price on 14 March 2022 of $3.15 per Uniti share;

  • o a 50.2% premium to the one-month volume weighted average price (VWAP) to 14 March 2022 of $3.33 per Uniti share;

  • o a 33.7% premium to the three-month VWAP to 14 March 2022 of $3.74 per Uniti share; and

  • o An implied acquisition EV/EBITDA multiple of approximately 27.6x Uniti's 12 months underlying EBITDA of ~$135 million to 31 December 2021 and 25.7x Uniti's FY22F Consensus underlying EBITDA of $145 million.

• • Uniti's Board of Directors unanimously recommends that Uniti shareholders vote in favour of the Scheme in the absence of a Superior Proposal and subject to the Independent Expert concluding and continuing to conclude that the Scheme is in the best interests of Uniti shareholders.

• • The Scheme provides for equity rollover for Uniti Managing Director & CEO, Michael Simmons, (alongside certain members of the senior executive team)

  (together Rollover Shareholders), who are entitled to elect to receive some or all of their Scheme Consideration as scrip consideration (being non-voting shares in the holding company of the acquiring entity) rather than cash consideration.

1 Implied equity value based on cash proposal of $5.00 per Uniti share multiplied by 723.4 million diluted shares on issue. Enterprise value calculated as equity value plus net debt of $110 million, adjusted for $28.9 million paid in the Share-buy-back and also adjusted to reflect cash consideration of ~$91 million payable on conversion of 43.6 million options and other convertible securities on issue.

• • The Scheme is subject to certain conditions, including approval from Uniti shareholders and the Australian Foreign Investment Review Board which must be satisfied before it can be implemented.

Overview

Uniti has entered into a SID with the Morrison/Brookfield Consortium under which the Morrison/Brookfield Consortium will acquire 100% of the issued share capital of Uniti for a cash price of $5.00 per share by way of a Court-approved scheme of arrangement.

Uniti also intends to pay a fully franked special dividend on or before the Scheme implementation date (Permitted Dividend). There may be an opportunity for eligible shareholders, subject to their marginal tax rate, to receive a benefit from franking credits attached to any such Permitted Dividend. The amount payable under the Scheme will be reduced by the cash amount per share of any Permitted Dividend (but not the value of any franking credits). The declaration and payment of a Permitted Dividend remain at the discretion of the Uniti Board and will be subject to tax advice.2

Uniti Directors Unanimously Recommend the Scheme

The Uniti Board unanimously recommends that Uniti shareholders vote in favour of the Scheme, and each director intends to vote all of the Uniti shares held or controlled by them in favour of the Scheme, in the absence of a Superior Proposal and subject to an Independent Expert concluding (and continuing to conclude) that the Scheme is in the best interests of Uniti shareholders.3 Mr Simmons makes his recommendation and declares his intention to vote in favour of the Scheme (in each case as described above) in the context of his controlled shares being expected to form a different class (with any other Rollover Shareholders) for the purposes of the Scheme. Mr Simmons has entered into a voting and rollover agreement (see further details below).

The transaction is fully funded by debt and equity commitments and binding on the parties. It is subject to limited conditions described below.

2 Uniti intends to apply to the ATO for a class ruling on the treatment of the cash consideration and the Permitted Dividend in the hands of Australia resident shareholders.

3 Mr Simmons has agreed to vote his Uniti shares in favour of the Scheme in the manner described in Annexure 2.

Uniti Independent Non-executive Chair, Graeme Barclay, noting that the Uniti Board including independent directors had considered and approved the proposed Scheme said, "The Uniti Board is unanimous in its view that this transaction is in the best interests of Uniti shareholders. In making this assessment, the Board, including independent directors, has carefully considered a range of matters including its view of the intrinsic value of Uniti taking into account the company's current position and future prospects, and the certainty for shareholders of this all-cash offer. We believe this transaction is a very good outcome for Uniti's shareholders, and for stakeholders more broadly, including our customers, executives, employees and suppliers."

Uniti Managing Director & CEO, Michael Simmons, said, "The value placed on Uniti by the Morrison/Brookfield Consortium is a testament to the strength of the Uniti business we have built over the last 3 years since our listing on the ASX in February 2019. We have built a high quality business with long-term annuity earnings, generated from best-in-class fibre access networks and telecommunications technologies. We are immensely proud of the achievements of the Uniti team and believe that under its proposed new ownership, Uniti will continue to build upon its now established place as a successful, growing participant in the market for high speed, high quality, fibre access networks."

Details of the Scheme Implementation Deed

The implementation of the Scheme is subject to a limited number of conditions which include:

• • Uniti shareholder approval;

• • Court approval;

• • Foreign Investment Review Board (FIRB) approval;

• • No Material Adverse Change to Uniti;

• • No Prescribed Occurrences; and

• • The Independent Expert's Report concluding that the Scheme is in the best interests of Uniti shareholders.

The SID contains customary exclusivity provisions including no shop, no talk, due diligence restrictions, a notification obligation, as well as a matching right in favour of MBC. A break fee and a reverse break fee have also been agreed between Uniti and MBC.

The parties have also agreed certain provisions relating to the disclosure of 'Commercially Sensitive Information' to 'Competitors'4 of Uniti in connection with Competing Proposals. Uniti is not permitted to provide 'Commercially Sensitive Information' to 'Competitors' until the matching right process in the SID has been followed and completed. Commercially Sensitive Information broadly includes information relating the identity of, and specific pricing information and contractual terms governing, Uniti's material customer and/or material developer contracts, arrangements or relationships, detailed information relating to Uniti's financial forecasts and growth strategies, potential M&A opportunities being considered by Uniti and information relating to Uniti's pricing strategies.

The Rollover Shareholders may elect to receive some or all of their Scheme Consideration as scrip consideration in the ultimate holding company of MBC under the Scheme, instead of the cash consideration. The Rollover Shareholders are required to make an election as to the percentage of their Uniti shares for which they wish to receive scrip consideration instead of cash consideration prior to the Scheme meeting. It is expected that the Rollover Shareholders will form a separate class of shareholders for the purposes of the Scheme and there will therefore be two scheme meetings - one for Rollover Shareholders only and the other for all other Uniti shareholders. In those circumstances, the Rollover Shareholders will not be permitted to vote at the Scheme meeting of all other Uniti shareholders but will be entitled to vote at their own Scheme meeting. Both Scheme meetings would need to pass a resolution approving the Scheme for the Scheme to become effective.

Full details of the conditions of the Scheme and other agreed terms are set out in the SID, a copy of which is attached to this ASX announcement as Annexure 1.

Voting and Rollover Agreement Material Terms

The material terms of the voting and rollover agreement entered into between Mr Simmons and the Morrison/Brookfield Consortium are summarised in Annexure 2.

4 A Competitor broadly includes (i) carrier licence holders, statutory infrastructure providers and carriage service providers (together, Telecommunications Business); (ii) persons who control or hold 20% or more of the voting interest in any Telecommunications Business; (iii) any of the respective affiliates of any person described in (i) or (ii).

Indicative timetable and next steps

A Scheme Booklet containing information relating to the Scheme, the Independent Expert's Report on whether the Independent Expert considers that the Scheme is in the best interests of Uniti shareholders, the reasons for the Uniti directors' unanimous recommendation and details of the Scheme meeting(s), is expected to be provided to Uniti shareholders in June 2022. Uniti shareholders will then have the opportunity to vote on the Scheme at the Court-convened Scheme meeting(s) of the relevant class of shareholders to which they belong, which are expected to be held in July 2022.

This announcement is authorised for release by the Board of Directors of Uniti Group Limited.

Further information

For further information, contact as below:

Media

Jim Kelly

Domestique Consulting P - 0412 549 083

Investors

Ashe-Lee Jegathesan - Company Secretary P - 03 9034 7897

[e-mail]

W -https://investors.unitigrouplimited.com/