Digital Realty and Goodman Buy Nearly 10% of Australia's NextDC for $476M

what happened

U.S. data-center owner Digital Realty Trust and Australian industrial property group Goodman Group together acquired a stake of nearly 10% in NextDC for about US$476 million. According to Dow Jones Newswires, their jointly owned special purpose vehicle paid A$9.22, or US$6.33, per share for a 9.9% interest in the ASX-listed data-center operator.

The partners said they have no agreement to engage further and do not plan a takeover bid, though they reserved the right to make one later. They said they look forward to working with NextDC's board and management on ways to help the company address its challenges.

why it matters

For markets, the deal is a signal that large sector investors are willing to take a position in the troubled operator. Last month NextDC's shares fell 42% to a near nine-year low after construction delays at a Melbourne facility led to a cut in earnings guidance, and analysts have questioned how the company will fund other projects.

market impact

NextDC: stake purchase by large investors supports the data-center operator's shares

• ▲NextDC shares pressure up — large strategic investors bought nearly 10% of the company and offered to help it through its difficulties

tags

instruments