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NEXTDC shares surge after rivals propose buying 9.9 per cent stake
Developed over time first seen 1 day ago
NEXTDC’s shares surged after the Australian data centre operator criticised a proposed share purchase by Goodman Group and Digital Realty as “opportunistic”. The board said it had received no takeover proposal, while the planned investment would give the two rival operators a stake of nearly 10 per cent.
The offer is to buy up to 9.9 per cent of NEXTDC for about A$715 million. Shares rose as much as 45.8 per cent to A$9.52 in early trade, after falling 45.8 per cent in October. That decline followed a power delay at NEXTDC’s M3 Melbourne site, lower FY27 guidance and a decision to shelve new development projects and land acquisitions.
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In short
- NEXTDC shares jumped as much as 45.8 per cent.
- Goodman and Digital Realty offered about A$715 million for up to 9.9 per cent.
- NEXTDC says it has received no takeover proposal.
How this story developed
- 22 hours ago NEXTDC said it would assess any genuine approach on its merits, as attention returned to its recent setbacks: a power delay at its M3 Melbourne site, reduced FY27 guidance and shelved development projects.
- 1 day ago Goodman and Digital Realty said they intended to acquire up to 9.9 per cent of NEXTDC for about A$715 million through an institutional book build, while reserving the right to bid for the company despite having no current plans to do so.
- 1 day ago NEXTDC shares jumped as much as 45.8 per cent to A$9.52 after the company branded a proposed investment by Goodman Group and Digital Realty “opportunistic” and said it had received no takeover proposal.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Goodman and Digital Realty could argue that buying a sizeable minority stake is a legitimate investment in a data centre operator whose shares have fallen sharply, and that the offer gives existing investors a chance to sell at a time of renewed interest. They have said they do not currently intend to bid for the whole company, so the purchase need not be treated as a takeover attempt.
The case against
NEXTDC’s board could argue that a large stake purchase by rival operators is opportunistic, particularly after operational setbacks and a steep share-price fall have left the company vulnerable. Even without a current takeover proposal, the buyers’ reserved right to bid later could create uncertainty about their intentions and the company’s strategic independence.
Explained simply
NEXTDC is an Australian company that builds and runs data centres: facilities that house computer servers and other equipment used to store and process digital information. Its shares are traded on the Australian stock market, and its plans depend on securing enough electricity and land for these large sites.
Goodman Group is a property group, while Digital Realty is an international data-centre operator. Their proposed purchase would give them a significant minority stake in NEXTDC, but they have said they do not currently intend to make a takeover bid. A larger shareholding can influence a company’s ownership and future decisions, so investors watch closely for signs of a possible change in control.
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Originally published by CNA as “Australia’s NEXTDC rallies; calls Goodman, Digital Realty share bid ‘opportunistic’”.