Bidding war for Telecity as rival offers £2.31bn

 
Tim Wallace
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DATA centre firm TelecityGroup received surprise takeover interest from US rival Equinix yesterday.

Telecity has already been deep into talks to merge with Dutch counterpart Interxion, which pushed any other would-be buyers to declare their hands.

Equinix’s £2.31bn bid sent Telecity’s share price soaring 21.7 per cent on the day. It follows the 15 per cent rise in February when the merger, which would create a joint firm worth $4.5bn (£3.1bn), was announced.

The bidder now has 28 days to make its offer firm, or to withdraw its interest in Telecity.

“The board of Equinix believes that this opportunity represents attractive shareholder value creation potential for Equinix, complementing and extending Equinix’s geographic footprint in Europe and enabling increased network and cloud density to better serve customers,” the firm said in a market announcement.

“In the United Kingdom, the acquisition of TelecityGroup would add capacity in Central London and Docklands that would complement the focus of Equinix’s current operations in Slough.”

And the firm added that it believes its offer will give better value to TelecityGroup’s shareholders.

Telecity’s board was less commital in its response.

“Having carefully considered the Equinix proposal in the light of this exception, the board of TelecityGroup has determined that it is required by virtue of its fiduciary duties to enter into discussions with Equinix and has decided to permit Equinix to undertake a short period of due diligence,” it said.

“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.”

BEHIND THE DEAL
ANTHONY GUTMAN - GOLDMAN SACHS

1 Gutman is working for Telecity on the deal. He was nominated for a City A.M. award last year for work on deals including B&M and SSP floats.

2 Recent M&A work includes the successful defence of pharma firm Shire, driving up the price offered by rival AbbVie’s takeover bid.

3 Gutman ran the London Marathon last month, running an impressive time and finishing the 26-mile course in three hours and 49 minutes.

Also advising...
Richard Cormack, Nicholas van den Arend and Alex Garner join Gutman from Goldman, while Telecity has also hired teams from Barclays’ investment bank, Oakley Capital and Greenhill & Co.