The joint venture targeted Nextdc shares at A$9.50 each, offering a 45% premium over the previous closing price and sparking the company's biggest stock rally since 2010. While Nextdc acknowledged the raid, it clarified that no formal takeover offer has been submitted. The company's recent vulnerability stems from an October decision to slash earnings guidance by one-third due to power connection delays caused by neighborhood blockades. Following the raid, Morgan Stanley raised its price target for Nextdc to A$9.50, citing that interest was predictable after the stock's steep decline.
Key points
Data center developers are facing mounting financial risks stemming from community opposi…: Data center developers are facing mounting financial risks stemming from community opposition and vital utility bottlenecks.
Nextdc became an attractive acquisition target after its shares dropped 47% following an…: Nextdc became an attractive acquisition target after its shares dropped 47% following an October earnings guidance reduction.
Sector challenges are spreading across Australia, recently forcing Goodman to cancel a Sy…: Sector challenges are spreading across Australia, recently forcing Goodman to cancel a Sydney project and Firmus Grid to withdraw its initial public offering.
Sources checked by our analysis pipeline: 1
Nextdc Ltd. shares jumped the most since 2010 after rival data center operators bought equity following a selloff in the Australian company.
The stock surged as much as 46% in Sydney after a venture between Goodman Group and US-listed Digital Realty Trust Inc. launched an after-market share raid on Wednesday. They’d sought to acquire a 9.9% stake at A$9.50 apiece, Nextdc said in a statement on Thursday, representing a 45% premium to the close on Wednesday.
“Nextdc does not know the outcome of the share raid,” the company said in the statement. “The Board considers this an opportunistic move by Goodman and Digital Realty” and hadn’t received a takeover proposal, it said.
Nextdc’s shares have been buffeted after the company cut earnings guidance by a third in October, following a power delay to a data center in Melbourne. That highlighted how infrastructure bottlenecks and local opposition can quickly become financial risks for developers of artificial intelligence infrastructure.
“It is not wholly surprising that strategic interest has surfaced” given the shares are down about 47% this year, Morgan Stanley analyst Andrew…
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