APDC Rebuffs NextDC and Appoints Agents to Sale of Portfolio
NEXTDC announced on 14 December 2017 that it intends to convene a meeting to wind up APDC Trust (Wind-up Proposal). NEXTDC states that the rationale for the Wind-up Proposal is that NEXTDC believes that a capital distribution is not in the best interest of securityholders. Given no decision has been made in respect of a capital distribution, NEXTDC's Wind-up Proposal is premature and ill founded. NEXTDC also has a material personal interest in respect of the Wind-up Proposal.
The leases for the properties between APDC and NEXTDC purports to give NEXTDC a right of first refusal for the sale of these properties (First Right), and accordingly, NEXTDC may have a significant interest in the Windup Proposal over and above that of other APDC members. APDC also refers to ASX Listing Rule 10.1 which provides that a sale of a substantial asset to a person who holds 10% or more of the securities (or has had such holding in the preceeding 6 months) must be approved by a resolution of securityholders.
The acquiring party and its associates will be precluded from voting on that resolution. ASX Listing Rule 10.1 promotes market integrity by regulating transactions with persons in a position of influence.
A copy of the Member Booklet issued by NextDC proposing the Wind up is here.
Expressions of Interest
APDC advised that having regard to recent portfolio sales on long leases, APDC’s triple net lease structures and taking into account the recent sale of the Metronode data centre portfolio which transacted at a 4.73% yield, the IBC believes that the APDC portfolio may be worth significantly more than implied by the current valuations.
NextDC rejected this comparison in a subsequent note this week.
APDC discussions with selling agents have reaffirmed that APDC’s portfolio could command a yield in this proximity which, based on a net income of approximately $14.06 million p.a., would equate to a portfolio value of circa $300 million representing an NTA of approximately $2.40 per security.
In order to decide whether it is in securityholders interests to proceed with a sale of some or all of APDC's assets as compared to other opportunities, the IBC has resolved to seek expressions of interest in respect of the sale of APDC's assets.
APDC Limited has appointed Mr Ian Hetherington and Mr Matthew Dunn from Savills (NSW) Pty Limited and Mr James Quigley and Mr Nick Potter from Cushman Wakefield to undertake a sales campaign for the whole portfolio.