Australian data center operator NextDC has bought a 14.1 percent stake in Asia Pacific Data Centre (APDC) trust, to fight agains the efforts to replace its leadership team. The change of management was proposed by 360 Capital, which owns a 19.9 percent stake in the organization.
Three of NextDC’s eight data centers – located in Sydney, Melbourne and Perth – make up the entirety of the AU$200m ($158.7m) APDC portfolio.
Tug of war
NextDC once owned APDC before spinning it off in 2013. The company insisted that it “does not presently intend to seek control of Asia Pacific Data Centres,” and that the AU$29m (USD$23.02m) investment was strictly strategic. It has stated that to retain the current management structure is in the best interests of shareholders, and that it would only review its decision not to seize control of the trust “if circumstances change.”
The proposal put forward by 360 Capital’s fund manager Tony Pitts seeks to take a “more proactive approach” to investments, deeming APDC’s current balance sheet to be “very lazy,” but it has received mixed responses.
The proposal was rejected by the APDC board, which stated it was considering other options for the potential acquisition of the trust’s assets, and an Institutional Shareholder Services (ISS) report advised investors against the move, stating it saw no “sufficiently compelling reason to justify the removal of APDC as the responsible entity,” and flagging potential independence and conflict of interest issues.
However others believe there are gains to be made from a reshuffle, with investor Viburnum Funds supporting this initiative.
Shareholders are due to vote on the decision on July 28th.