Thursday, November 23, 2017

NextDC says no, but 360 Capital says yes. Data center M&A war of the year gets a new twist

APDC securityholders advised to not take any further action until the group studies the best business strategy for its assets.

Australia has taken centre stage on the data centre merger and acquisition (M&A) scene as 360 Capital’s (ASX: TGP) and NextDC (ASX: NXT) fight off each other for the Asia Pacific Data Centre Group (ASX: AJD; APDC) business.

The bidding for the assets was thought to be over when the APDC rejected TGP’s last bid on September 7, favouriting NXT’s bid instead and recommending shareholders to support that same bid.

However, TGP has not taken the decision lightly and the company, which previously offered AU$1.95 per share to acquire the group, topping AU$222m, has come back with an all-cash offer.

TGP has made an unconditional, all-cash, off-market takeover offer to acquire all the securities of APDC for consideration of $1.95 per APDC security.

This compares to the previous offer in which APDC securityholders would receive $1.95 per APDC security comprising a capital distribution of $0.65 from APDC and a $1.30 cash consideration paid by 360 Capital.

APDC said in a statement: “The Board has previously recommended that APDC securityholders accept the NEXTDC Offer of $1.87 cash per APDC security, in the absence of a superior proposal.

“The Board is considering the 360 Offer, and has sought further information from 360 Capital in relation to the timing for lodgment of its Bidder’s Statement.

“APDC expects to be in a position to provide further information, including advice for securityholders, prior to market open on Thursday 14th September 2017.”

360 Capital Group intends to fund its latest offer through existing cash reserves and borrowings.

The group’s continuous attempt to win the bidding process could make TGP the majority shareholder of APDC after the deals closure.

360 Capital already owns 19.82% of the company which puts pressure on NextDC to reach a minimum of 50.1% of the shares to avoid becoming a minority shareholder at 20.77%.