Equinix gatecrashes Interxion takeover by making play for TelecityGroup

Doubts cast over Interxion takeover, after Equinix disrupts merger talks by making separate play for TelecityGroup

The completion of TelecityGroup’s proposed purchase of fellow datacentre operator Interxion has been thrown into doubt after Equinix embarked on takeover talks with the former party.

TelecityGroup initially agreed to acquire Interxion in February 2015, with the pair signing a non-binding agreement worth $2.2bn.

That all-share deal would have seen Interxion shareholders own 45% of the merged companies, while Telecity’s would hold the remaining 55%. The deal was set for completion before the end of the 2015.

But Equinix has now thrown its hat in the ring and confirmed that it has begun preliminary talks with TelecityGroup about a possible mixed cash/stock offer for the firm that would value it at around £11.45 per share.

“Equinix believes this opportunity represents attractive shareholder value creation potential, complementing and extending Equinix’s geographic footprint in Europe and enabling increased network and cloud density to better serve customers,” Equinix said in a statement.

The deal would bolster the capacity of Equinix’s existing datacentre estates in central London, Docklands and Slough, while allowing it to expand its portfolio with additional facilities in Dublin, Helsinki, Istanbul, Milan, Stockholm and Warsaw.

Speaking to Computer Weekly at the opening of Equinix’s new Slough-based datacentre in April 2015, the company’s UK managing director, Russell Poole, said building out its portfolio of facilities is inevitable as the demand for cloud-based services from CIOs and business leaders increases.

TelecityGroup speaks out

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“The implementation agreement that has been entered into by TelecityGroup and Interxion prohibits either from soliciting alternative proposals and from discussing alternative proposals except in limited circumstances,” said TelecityGroup, in a separate statement.

“One of the exceptions to the restriction on entering into discussions with a third party regarding an alternative proposal is where the directors of the relevant party believe they are required to do so by virtue of its fiduciary duties or other applicable law.”

On this basis, the company has decided to entertain Equinix’s approach, the statement continued, and has granted the company permission to carry out a short period of due diligence in preparation for a potential tie-up.

“At this stage, there can be no certainty that any offer will ultimately be made for TelecityGroup, or as to the terms on which any offer would be made,” the statement concluded.

As it stands, Equinix has until 5pm on 4 June 2015 to either make an offer for TelecityGroup or confirm it has no intention to.

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