APDC drops NextDC datacentre sale price to AU$280m

NextDC will need to cough up AU$280m if it wants to own the three datacentres it currently leases from Asia Pacific Data Centre Group.
Written by Asha Barbaschow, Contributor

Asia Pacific Data Centre Group (APDC) has made NextDC an offer to acquire the former's datacentres in Sydney, Melbourne, and Perth, giving the datacentre-as-a-service company 20 days to agree to the AU$280 million offer.

The three datacentres are currently leased by NextDC.

In a statement issued to the ASX on Wednesday evening, the property trust of APDC explained that the multimillion-dollar figure equates to a 5 percent initial yield and a premium of AU$67.2 million -- or 31.6 percent -- to the last valuation.

APDC was originally created as a real estate investment trust that was responsible for the buildings and land upon which NextDC operates its business, and, under the terms of the leases, NextDC has first right of refusal on any sale of the datacentres.

The ownership of APDC changed in November following a bidding war between NextDC and 360 Capital, which saw the latter emerge triumphant with 67 percent ownership, and subsequently install its preferred board members.

NextDC had offered APDC AU$210 million in cash for its facilities in July, AU$0.05 per share higher than the offer made by 360 Capital a day prior.

During the holiday period, APDC pitched a sale price of AU$300 million for the three datacentres to NextDC, pointing to the recent sale of Metronode to Equinix for AU$1 billion as its reasons for the valuation.

NextDC struck out at such valuations, stating that Metronode is a datacentre operator, not a real estate trust.

"APDC's reference to Metronode's assumed 4.73 percent acquisition yield is akin to one suggesting that a property landlord should trade on the same capitalisation rate or multiple as its tenant be they BHP or Google," NextDC CEO Craig Scroggie said at the time.

"This has no logic and is simply incorrect."

At the time, NextDC said APDC assets were recently valuated "only a few months ago" at AU$213 million.

In giving NextDC 20 business days to accept its latest offer, APDC said for the next 180 days it may sell the datacentres to a third party on terms "no more favourable" than the ones extended to the company.

Earlier in December, NextDC announced its intention to wind up the trust underpinning APDC, stating that it is unhappy with the direction that 360 Capital is taking the company under its steerage.

Also this week, NextDC announced that it will offer dedicated and private access to Oracle Cloud through Oracle Cloud Infrastructure FastConnect, via the AXON network in 40-plus datacentres in Australia.

For the 2017 financial year, NextDC reported an after-tax profit of AU$23 million.


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