The Australian Government Takeover Panel has knocked back NextDC's application to block the sale of its data centres properties to investment firm 360 Capital Group.
The battle for ownership of Asia Pacific Data Centres – the property trust that owns three of NextDC's data centres – heated up last week when NextDC applied to block the rival bid from 360 Capital.
APDC accepted 360 Capital's offer to buy the remaining shares in the property trust it didn't already own for $1.95 each on 14 September, beating out NextDC's previous offer of $1.87 per share. NextDC let its bid lapse four days later, but already controls a 29.2 percent interest in APDC.
NextDC filed the application with the government takeover panel on Tuesday last week, requesting the shares 360 Capital acquired in APDC after submitting its bidder's statement on 4 October be returned, and that 360 Capital and APDC both issue corrective statements.
The data centre operator's argument hinged on 360 Capital's reference to a proposed capital distribution which could be implemented after 360 Capital's acquisition offer period ends. NextDC raised concerns that capital would be used to repay a debt facility used by 360 Capital to fund its bid, which would require shareholder approval. NextDC claimed this was not adequately disclosed.
The government panel today declined to step in, saying there was "no reasonable prospect" that it would declare 360 Capital's bid to be in unacceptable circumstances. The panel noted that 360 Capital did disclose that any capital distribution is still subject to legal obligations, and that it would only make a decision after receiving legal and financial advice.
NextDC and 360 Capital have traded barbs over a potential APDC acquisition since May. NextDC said an acquisition would be in line with its strategy to own more of its data centres, while 360 Capital wants to use the property portfolio as a launch pad to invest more into the Asia-Pacific data centre market.