Digital Realty (NYSE: DLR), a leading global provider of data center, colocation and interconnection solutions, announced today its shareholders approved all proposals related to the previously announced pending combination with InterXion (NYSE: INXN), a leading provider of carrier- and cloud-neutral colocation data center services in Europe.
“We were gratified by the overwhelming shareholder support for the combination, with over 90% of votes cast by both sets of shareholders in favor of the proposals necessary to consummate the combination,” said Digital Realty Chief Executive Officer A. William Stein. “We look forward to completing the exchange offer and closing the transaction in short order. Together with InterXion, we will be even better positioned to enable customers to solve for the full spectrum of data center requirements across a global platform, and we are confident the combination of our two organizations will significantly enhance our ability to create long-term value for the customers, shareholders and employees of both companies.”
Regulatory Approval Update
Earlier this morning, Digital Realty and InterXion received approval for the transactions contemplated by the Purchase Agreement from the French Ministry of Economy and Finance, the foreign investment regulatory authority. As a result, all regulatory approvals required under the Purchase Agreement have now been obtained, and the condition of the Exchange Offer related to receipt of required regulatory approvals has been satisfied.
Opportunity for InterXion Shareholders to Receive Digital Realty’s Declared Quarterly Dividend
Earlier this week, Digital Realty’s Board of Directors authorized a common stock cash dividend of $1.12 per share to common stockholders of record as of the close of business on March 17, 2020. If 80% or more of outstanding InterXion shares on a fully-diluted and as-converted basis are tendered by the expiration of the initial offering period and all other required conditions are satisfied as described below, tendering InterXion shareholders should be holders of record of Digital Realty stock as of the record date and have the opportunity to receive the first-quarter dividend.
If the initial offering period is extended for any reason, InterXion shareholders would not be expected to become holders of record of Digital Realty common stock by the close of business on March 17, 2020, and consequently would not be entitled to receive the first-quarter dividend in any closing of the offer.
Anticipated Timing for Completion of the Offer
Digital Realty expects to complete the pending exchange offer for all outstanding ordinary shares of InterXion as soon as reasonably practicable. Subject to satisfaction of the remaining required conditions, if 80% or more of the outstanding InterXion shares on a fully-diluted and as-converted basis are validly tendered and not withdrawn at the expiration of the initial offering period, Digital Realty expects to accept the validly tendered shares as early as March 9, 2020, with the post-offer reorganization transactions to be completed as soon as practicable after the expiration of any subsequent offering period.
Unless the offer is extended, the initial offering period will expire at 12:01 a.m. EDT on March 9, 2020. (In other words, one minute after midnight on Sunday night / Monday morning. Please note, the Depository Trust Company and the exchange agent are closed on Saturdays and Sundays.) InterXion shareholders are encouraged to validly tender their shares before the close of normal New York business hours on Friday, March 6, 2020. No guaranteed delivery procedures apply.
Lowering the Minimum Condition
The offer is conditioned upon receipt by Digital Intrepid Holding B.V. (“Buyer”), a subsidiary of Digital Realty Trust, Inc., of a number of InterXion shares having been validly tendered and not withdrawn that would allow Buyer to acquire at least 80% of the outstanding InterXion shares on a fully-diluted and as-converted basis at the closing of the offer.
If less than 80% but more than 66 2/3% of the outstanding InterXion shares are tendered in the initial offering period, Digital Realty or Buyer may elect to reduce the minimum condition to 66 2/3% of the outstanding InterXion shares on a fully-diluted and as-converted basis, in which case the offer shall be extended for at least five business days (and no subsequent offering period will be provided).
Digital Realty or Buyer may also reduce the minimum condition to 66 2/3% prior to the expiration of the initial offering period (in which case a subsequent offering period will be provided). Digital Realty or Buyer may reduce the minimum condition below 66 2/3% with prior written consent from InterXion, subject to compliance with applicable laws.
Treatment of Untendered Shares after the Offer
As promptly as practicable following the later of the time at which Buyer accepts the tendered InterXion shares and the expiration of any applicable subsequent offering period, the parties shall initiate the post-offer reorganization.
If less than 95% of the outstanding InterXion shares are acquired by Buyer in the offer, the post-offer reorganization will result in non-tendering holders of InterXion receiving shares of Digital Realty common stock (and/or cash in lieu of fractional shares of Digital Realty common stock) pursuant to a liquidation distribution (rather than the offer). Non-tendering holders of InterXion shares who receive shares of Digital Realty common stock (and/or cash in lieu of fractional shares of Digital Realty common stock) pursuant to the liquidation distribution generally will be subject to a 15% Dutch dividend withholding tax.
If 95% or more of the outstanding InterXion shares are acquired by Buyer in the offer, Buyer will initiate Dutch compulsory acquisition proceedings, which will enable it to acquire the remaining InterXion shares against a cash amount as determined by a competent Dutch court. Non-tendering holders of InterXion shares who receive cash pursuant to Dutch compulsory acquisition proceedings will not be subject to the 15% Dutch dividend withholding tax. However, this process may materially delay non-tendering InterXion shareholders’ receipt of this cash consideration.
About Digital Realty
Digital Realty (NYSE: DLR) supports the data center, colocation and interconnection strategies of customers across the Americas, EMEA and APAC, ranging from cloud and information technology services, communications and social networking to financial services, manufacturing, energy, healthcare and consumer products. To learn more about Digital Realty, please visit digitalrealty.com or follow us on LinkedIn, Twitter, Facebook, Instagram and YouTube.