Investment Matters

Company news: 360 Capital and the Asia Pacific Data REIT

The ongoing takeover battle for the Asia Pacific Data Centre REIT (APDC) by 360 Capital and NextDC continues this week.   (Clients with a property allocation own a small weighting in APDC, which owns the three data centre properties in Sydney, Melbourne and Brisbane.  NextDC is the tenant.)  360 Capital is an investment in most clients' equity allocation.

360 Capital increased its offer to $1.95, being $1.30 cash plus $0.65 capital return.  The capital return would have been funded by a new bank loan package, which 360 Capital had arranged.  APDC is currently inefficiently geared; 8.6% as at 30-Jun-17 (click here in relation to efficient allocation of capital).

We question the decision of APDC directors to not support the capital distribution and to reject the 360 Capital offer.  We do not understand why they have made the recommendation; in fact, we see it as poor and unreasonable and don't view it as in the interest of APDC security holders.  We intend to seek clarification from APDC in relation to this matter.