Wednesday, October 18, 2017

Penguins OP Sub places $600m tender offer on DuPont Fabros’ senior notes following Digital Realty’s acquisition

Tender Offer and Consent Solicitation follow on from Digital Realty’s $7.6bn acquisition go DuPont Fabros and its 12 data centres.

Digital Realty (NYSE: DLR) has announced that Penguins OP Sub has commenced a cash tender offer for any and all of the $600m aggregate outstanding principal amount of the 5.875% Senior Notes due 2021 issued by DuPont Fabros Technology (NYSE: DFT).

Penguins OP Sub is an indirect subsidiary of Digital Realty Trust. The group has also put forward a related consent solicitation (together, the “Tender Offer and Consent Solicitation”) to effect certain amendments to the indenture governing the Notes (the “Indenture”).

These amendments would eliminate substantially all of the restrictive covenants and certain events of default and related provisions contained in the Indenture and shorten the minimum advance notice requirement to the Holders prior to a redemption to two business days.

The Tender Offer and Consent Solicitation are being conducted in connection with a previously announced merger agreement between Digital Realty and DuPont Fabros Technology and certain of their subsidiaries.

Holders who tender their Notes will be deemed to consent to all of the Proposed Amendments, “and holders may not deliver consents without tendering their Notes”, Digital Realty said in a statment.

The company also said: “The Tender Offer and Consent Solicitation will expire at 11:59 p.m., New York City time, on September 27, 2017 unless extended or earlier terminated by us in our sole discretion (such date and time, as may be extended or earlier terminated, the “Expiration Date”).”

Penguins OP Sub has engaged Citigroup Global Markets as Dealer Manager and Solicitation Agent for the Tender Offer and Consent Solicitation.

Digital Realty announced it had entered into a definitive agreement to acquire DuPont Fabros for $7.6bn in June 2017.

The deal is expected to close before the end of 2017, with DuPont Fabros shareholders receiving a fixed exchange ratio of 0.545 Digital Realty shares per DuPont Fabros share.

Digital Realty currently operates 156 properties across 33 global metropolitan areas. The merger will help the provider augment its reach across Northern Virginia, Chicago, Silicon Valley and Canada, with the addition of 12 sites comprising more than 3.2 million gross sqf and 278MW of critical load capacity.