Australia's Firmus to launch $7 billion IPO on October 6

Australian data centre ⁠operator ⁠Firmus will launch its initial public offering on October 6, according to a term sheet reviewed by Reuters, seeking to raise $7 billion in the second-largest IPO in Australia's history.

A term sheet ‌sent to investors on Monday said the institutional ‌bookbuild ‌would start on October 6 and close ‌on October 7, with a prospectus expected ⁠to be lodged on October 8.

Retail investors will be able to bid for stock from October 12 to 19, the term sheet showed.

The company's shares will start trading on the ​Australian Securities Exchange on October 22, according to the term sheet.

Firmus declined to comment.

The IPO would be the fourth-largest ⁠globally so far this year, according to Dealogic data.

The company, founded in 2019 by Oliver Curtis, Tim Rosenfield and Jonathan Levee, could raise up to US$5.5 billion ($7.7 billion), with an over-allotment option, or a so-called greenshoe, to raise an extra US$500 million.

Greenshoes are common feature of US and international IPOs. While some larger Australian IPOs, particularly those led by major investment banks have featured them previously, many ​smaller ASX listings proceed without them.

The shares ⁠of Firmus' founders would be locked up after ⁠listing under escrow arrangements, according to an investor presentation seen by Reuters. 

Only 10 percent of ​their shares would be released after one year, and a further ‌39.9 percent after two ⁠years.

The IPO, set to trail only Telstra's Australian listing in 1997, will test investor appetite for companies building the data centres and related systems to meet ‌demand for the computing power behind the artificial intelligence boom.

Some industry leaders have warned that the rapid pace of investment and model development may be difficult to sustain.

Community backlash against data ​centres is also growing due to concerns over their power and water consumption, with Firmus facing local opposition over its planned projects in Australia.

Firmus has two operational ‌data centres in ⁠Australia and Singapore. Five ​are under development across the Asia-Pacific.