Sunday 23 October 2016

Equinix makes €3bn bid for Telecity

Published 07/05/2015 | 12:40

A Telecity data centre in Stockholm Credit: Telecity Group
A Telecity data centre in Stockholm Credit: Telecity Group

One of Ireland’s largest data centre operators is the target of a new €3bn takeover approach from a rival.

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UK-based Telecity, which runs three data centres in Dublin, has received the takeover approach from US data centre giant Equinix.

The move would finally give Equinix a footprint in Ireland, which is a prized location for data centres in Europe because of the large online multinational firms based here.

There has been a flurry of data centre activity in Ireland in recent months, with Apple announcing an €850m facility in Athenry, County Galway.

Other multinationals set to build data centres here include Yahoo and EMC, while at least one telecom operator here is also likely to announce plans soon.

The Telecity takeover approach, which is made up of shares and cash, interrupts a separate merger initiative between Telecity and Dutch rival Interxion.

Telecity and Interxion had agreed to merge two months ago. Telecity’s board is obliged to consider the Equinix offer, the company said.

Interest for data centers is increasing as consumers and companies want to store information in the so-called cloud, so it can be accessed anywhere from mobile phones, tablets and desktop computers.

“The board of Telecity 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,” Telecity said.

Equinix said a deal with Telecity would create “a more compelling combination than the proposed merger with Interxion and would deliver greater value for Telecity shareholders.”

As well as establishing a presence in Ireland, a takeover of Telecity would extend Equinix’s reach to European countries such as Italy and Finland.

Interxion said in a statement it continues to believe that a merger with Telecity “is a strategically compelling combination that delivers meaningful value” to shareholders of both companies.

There is no certainty that Equinix will make an offer for Telecity. If the deal goes ahead, 54pc of the payment would be in cash and the remainder in Equinix stock, Telecity said.

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