Exclusive: Equinix nears deal for Telecity - sources

Reuters News
Posted: May 28, 2015 5:46 PM

By Liana B. Baker

(Reuters) - U.S. data center company Equinix Inc is nearing a deal to acquire British peer Telecity Group Plc, according to people familiar with the matter, in a tie-up that would create the largest data center player in Europe.

A deal could be announced as early as Friday, one of the people said. The negotiations are in the final stages but could still fall apart, the people added.

The deal price could not be learned. Equinix had previously offered 2.3 billion pounds ($3.5 billion) to convince Telecity to enter into negotiations. Telecity shares ended trading in London at 1,090 pence on Thursday, giving it a market capitalization of $2.2 billion pounds.

The sources asked not to be identified because the negotiations are confidential. Equinix declined to comment, while Telecity did not immediately respond to a request for comment.

Founded in 1998, Equinix operates more than 100 data centers in 33 markets in five continents. It previously said that buying Telecity would give it more locations in Britain, including central London. It would also expand its footprint in cities such as Dublin, Milan, Istanbul, Stockholm, Helsinki and Warsaw.

Telecity in February said it would buy Dutch rival Interxion Holding NV in a $2.2 billion all-stock deal. Equinix said earlier this month that acquiring Telecity would create a more compelling combination than the proposed merger with Interxion and would deliver greater value for Telecity shareholders.

Based in Redwood City, California, Equinix spent $482 million on buying IXEurope, a European colocation company, in 2007.

Equinix received a nod from the U.S. Internal Revenue Service on May 20 that it could convert into a real estate investment trust.

(Reporting by Liana B. Baker in New York; Editing by Leslie Adler)