NextDC’s latest takeover bid for the properties housing its data centres is set to be accepted, months after NextDC knocked back the chance to buy the building portfolio.
NextDC said in financial filings today it expects the share buyback to come to $163 million, with the repayment of Asia Pacific Data Centres’ (APDC) debt and restructuring costs to bring the total cost to $200 million.
The data centre operator was offered the chance in February to buy back APDC for $280 million, a significant increase on the $207 million it received for spinning out the property portfolio in 2012.
APDC’s stakeholders have since been in constant contact with NextDC to discuss sales and takeover offers, with the valuation of the property portfolio peaking at what NextDC called an “unjustifiable” $300 million.
NextDC’s latest bid seeks to acquire the remaining 70.8 percent of APDC shares it does not already own with an unconditional cash offering of $2 per security, plus an additional special distribution of $0.02 per share. This is significantly higher than the previous offer of $1.85 per share.
APDC’s three core properties in Sydney, Melbourne and Perth were independently valued at $261 million at 30 June this year.
Property group 360 Capital, who took a controlling interest in APDC in May 2017, indicated it intends to accept the NextDC’s offer, giving the data centre company a 96.5 percent interest in the portfolio.
The company has signaled it would then begin the process of compulsorily acquiring the remain securities.
Ownership of the buildings it currently leases is expected to save NextDC $14 million per year before interest.
NextDC CEO Craig Scroggie said ownership of APDC would also give the company greater flexibility in its capital structure as it “continues to build out its significant pipeline of data centre developments”.