Goodman Group and US-based Digital Realty have teamed up to offer AU$715 million (US$499.7 million) for a 9.9 percent stake in Australian data center operator NextDC, as the company faces mounting challenges surrounding its development plans.
The proposed investment was disclosed in a term sheet lodged with the Australian Securities Exchange (ASX) after market trading closed on Wednesday, according to reports by Reuters and other media outlets.
The offer comes as NextDC’s share price has come under significant pressure, falling by as much as 45 percent in recent weeks. The downturn follows the company’s October announcement that it would defer AU$140 million (US$97.9 million) in customer revenue due to delays in electricity network upgrade works at its M3 data centre in Melbourne.
Located in West Footscray, the M3 facility was scheduled for expansion, which would increase its capacity from 60MW to 225MW. However, the project has been delayed until the 2027/28 financial year following community opposition to plans to install larger electricity poles.
The proposed infrastructure upgrade would see power pole heights increase from 11 to 22 metres to accommodate greater electricity supply to the facility. Local council approval is still pending, while electricity provider Jemena is also investigating safety concerns raised in relation to the project.
NextDC opened its M3 facility in 2022. Following confirmation of the delays, the company announced it would suspend new development projects and land acquisitions across its portfolio for the foreseeable future.
The company currently operates or has under development 20 data centers across Australia, alongside sites in the planning or evaluation stages in Japan, Thailand, Malaysia and Singapore. In July, NextDC secured AU$500 million (US$347 million) in debt financing.
Under the proposed transaction, Goodman Group and Digital Realty are offering AU$9.50 (US$6.65) per share, representing a 45.5 percent premium to NextDC’s share price at the close of trading on Wednesday.
According to the submitted term sheet, the consortium does not intend to pursue a full takeover or acquire a controlling interest in NextDC as part of the proposed investment. However, the companies have left open the possibility that their position could change in the future.
JPMorgan is leading the offer.
Data Centre Dynamics (DCD) has contacted NextDC, Goodman Group and Digital Realty for comment.
