At a glance
- The bidders said they will not make a full takeover bid or seek a controlling stake in NextDC.
- For allocators, the term sheet sets a reference price for Australian data-center equity at a point when the local build-out has stalled.
- The constraint is a power upgrade at M3 in West Footscray, which NextDC opened in 2022.
Digital Realty and Goodman Group offered AU$715 million (US$499.7 million) for 9.9% of NextDC, bidding AU$9.50 (US$6.65) a share, a 45.5% premium to the Australian data-center operator's closing price Wednesday.
The bidders said they will not make a full takeover bid or seek a controlling stake in NextDC. The statement came in a term sheet filed with the Australian Stock Exchange after the close and reported by Reuters and others, with JP Morgan leading the offer.
For allocators, the term sheet sets a reference price for Australian data-center equity at a point when the local build-out has stalled. NextDC said it would pause new development projects and land acquisitions across its portfolio. Its M3 expansion in Melbourne, from 60MW to 225MW, waits on power infrastructure that local councillors have not approved.
The constraint is a power upgrade at M3 in West Footscray, which NextDC opened in 2022. Installing taller electricity poles to carry more power to the site has been pushed to the 2027/28 financial year after community protests. The work would double pole heights in the area from 11 to 22 meters. Local councillors have yet to approve it, and electricity provider Jemena is reviewing safety concerns raised about the upgrade.
In October, NextDC said it had deferred AU$140 million (US$97.9 million) of customer revenue because of the delays. Its share price has fallen by as much as 45% in recent weeks.
NextDC operates or is developing 20 data centers across Australia and has sites in planning or under evaluation in Japan, Thailand, Malaysia and Singapore. It raised AU$500 million (US$347 million) of debt financing in July.
Goodman Group, based in Australia, develops data centers and commercial property. Digital Realty is a US data-center operator that, as Private Wealth Daily previously reported, posted a record $2.5 billion backlog in its latest quarter.
The term sheet says the no-control position could change, which keeps open the possibility that the 9.9% stake is a first step rather than a passive holding.
Bidders offered AU$9.50 a share, a 45.5% premium
Offer terms for 9.9% of NextDC, filed with the ASX after Wednesday's close
Reported by the Data centers & fiber desk from Data Center Dynamics and Reuters. Published . Corrections