Nextdc Ltd. shares jumped the most since 2010 after rival data center operators bought equity following a selloff in the Australian company.
The stock surged as much as 46% in Sydney after a venture between Goodman Group and US-listed Digital Realty Trust Inc. launched an after-market share raid on Wednesday. They’d sought to acquire a 9.9% stake at A$9.50 apiece, Nextdc said in a statement on Thursday, representing a 45% premium to the close on Wednesday.
“Nextdc does not know the outcome of the share raid,” the company said in the statement. “The Board considers this an opportunistic move by Goodman and Digital Realty” and hadn’t received a takeover proposal, it said.
Nextdc’s shares have been buffeted after the company cut earnings guidance by a third in October, following a power delay to a data center in Melbourne. That highlighted how infrastructure bottlenecks and local opposition can quickly become financial risks for developers of artificial intelligence infrastructure.
“It is not wholly surprising that strategic interest has surfaced” given the shares are down about 47% this year, Morgan Stanley analyst Andrew McLeod said in a note before Thursday’s open. The bank raised its price target to A$9.50.
Powering the facility had required network operator Jemena Electricity Networks to install high-voltage transmission poles through inner-city streets. Those works were paused in September after residents blockaded work trucks with their cars and filled in excavation pits.
The pressures extend beyond Nextdc. Goodman scrapped its own proposed data center in suburban Sydney due to pushback from locals, while Firmus Grid Ltd. pulled its initial public offering after investors balked at its targeted A$30 billion valuation last month.
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