The TelecityGroup UK data centre business has confirmed that US rival Equinix is battling to buy the company, and head off its planned merger with Dutch company Interxion.
Equinox is offering 1145 pence per share, payable by a mixture of cash and Equinix stock, with around 54 percent paid in cash and approximately 46 percent in Equinix stock.
TelecityGroup noted that a previous agreement with Interxion Holding NV announced on 9 March 2015 prohibits either firm from "soliciting alternative proposals and from discussing alternative proposals except in limited circumstances".
However, it added that one of the exceptions to the restriction on entering into discussions with a third party is "where the directors of the relevant party believe they are required to do so by virtue of their fiduciary duties or other applicable law". On this basis, TeleCity said it "has decided to permit Equinix to undertake a short period of due diligence”.
According to market rules, Equinix now has until 4 June 2015 to make a formal offer for the company.
Equinix confirmed in a statement that it is in preliminary discussions with the board of TelecityGroup regarding a possible cash and share offer for the company.
"The board of Equinix believes that this opportunity represents attractive shareholder value creation potential for Equinix, complementing and extending Equinix's geographic footprint in Europe and enabling increased network and cloud density to better serve customers,” the firm said.
It added that the acquisition of TelecityGroup would add capacity in "Central London and Docklands that would complement the focus of Equinix's current operations in Slough".
"Additionally, the acquisition would add capacity in several of Equinix's current locations throughout Europe, and extend Equinix's footprint into new locations with identified cloud and interconnection needs, including Dublin, Helsinki, Istanbul, Milan, Stockholm and Warsaw,” it said.
Earlier this year, TechMarketView analyst Kate Hanaghan said of the TelecityGroup/Interxion merger: “The data centre services game is about scale and scope of product. In other words, customers want access to highly resilient data centres, with good geographical coverage for services that cover straight co-location through to complex and highly secure private clouds.”