NEXTDC Limited (ASX: NXT) (“NEXTDC” or “the Company”) is happy to announce that it is having relevant interest in the stapled securities (stapled securities are those securities which are created as a result of two or more securities bounded through a contract) about 97.0% of the securities of Asia Pacific Data Centre Group (ASX: AJD). Asia Pacific Data Centre Group is also known as APDC Group. As per the terms of NEXTDC on market takeover, the announcement of the Bid was made to the market on 8 October 2018 that the company made an offer wherein it will pay AJD security holders the cash consideration of $2.00 per security. The Offer remains unconditional and will be taken as the company’s ‘best and final’ price. The Offer made will close on 26 November 2018 at 4.00 pm (Sydney time). As the company is showing a relevant interest of 97% of AJD shares, it also will further proceed to acquire outstanding AJD securities from the date 23 October 2018. AJD security holders have not yet accepted the offer made by the company and may still sell their securities on market before 26 November 2018 at 4 pm Sydney time.
As per the release, NEXTDC is positive about the AJD offer and find it beneficial to own AJD portfolio. This is because currently AJD is working on expansion of its capital base (AJD was leasing it for its capital base expansion). The reason of interest in the AJD shares could be the growing and exploding demands for the cloud computing services at the data centres. The company believes that in long term these securities will deliver growth in earnings and hence will justify the premium which they are giving to the AJD shareholders.
As per the estimation of Management, the proposal made for the acquisition will help in strengthening the balance sheet through the addition of further tangible assets and also provide NEXTDC with an additional $14 million of recurring annual cash flow as saving.
Meanwhile, 360 Capital Group has disposed of its entire holding, i.e., 67.3% interest in AJD.
AJD is showing a positive stock performance for the period of 6 months, 1 year and 5 years and from its inception. However, there was a negative performance in the YTD showing result of -1.46%. Apart from this YTD performance, its 6 months, 1 year, 5 years results depicted 7.45%, 3.33% and 80.37% in terms of stock price rise. From its inception, it shows a performance report of 85.33%. AJD’s shows a poor balance sheet with total financial asset of A$ 5.986 million and the total liabilities are A$ 31.671 million indicating AJD’s poor condition in meeting its long-term obligations. AJD had made a profit of A$ 53.354 million. Net cash flow from the operating activities was A$ 6.871 million. Total number of securities on issue is 115,000,100 units with net tangible asset backed per security coming to be A$ 2.02.
AJD’s shares are currently trading at A$ 2.00 (AEST 3:00 pm) with market capitalization of A$ 230 million and PE ratio of 4.310x. The price movement of the share represents moving average convergence and divergence line above the signal line.
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