UK data centre specialist Telecity has been bought by a US rival in a £2.35bn deal after a bid battle for the business.
Equinix is offering £11.45 a share in a mixture of cash and paper, leading rival suitor Interxion to withdraw from the running. Telecity shareholders will end up with 10.1% of the merged company, and its executive chairman John Hughes will join the board.
Telecity shares, which have climbed 21% since Equinix announced its interest, have dipped 4p to £10.86. Numis analyst David Toms said:
As anticipated, the Equinix bid has been formalised at 1145p a share (plus a potential interim divi of up to 5p), with 572.5p cash, 0.0327 Equinix shares and a “mix and match” option. The deal is expected to complete in the first half of 2016 dependent on regulatory clearance (which we think will be forthcoming).
Both the premium and the multiple look attractive and we expect shareholders to vote in favour of the deal. We do not expect a counter bid; we think Equinix probably has the deepest pockets and greatest synergies of any potential bidder.
