Telecity, Interxion deal in doubt as Equinix weighs in

>

Telecity, which operates some of the huge computer centers which process traffic on the Internet, said on Thursday it believed it was required "by virtue of its fiduciary duties" to enter talks with Equinix over a possible offer of 1,145 pence per share, a 27 percent premium to Wednesday's closing price.

The agreement between Telecity and Interxion prohibited either company from soliciting or discussing alternative proposals except in limited circumstances.

In a separate statement, Equinix said the Telecity deal would add capacity to several of its locations in Europe such as London and extend its footprint into new locations such as Dublin, Milan and Warsaw.

Its offer would be made up of 54 percent cash and 46 percent in Equinix stock, Telecity said.

Telecity's deal with Europe-focused Interxion had come on the back of looking to tap growing demand for "cloud" technology, whereby the data and processing for devices like smartphones is carried out on millions of remote servers.

That deal would involve Interxion shareholders receiving 2.3386 new Telecity shares for each Interxion share, which valued the offer at $2.2 billion when it was agreed in February.

Telecity also released a first-quarter trading update and reiterated guidance for full-year revenue growth of between 8 and 10 percent and stable core margins.

(Reporting by Neil Maidment; Editing by Karolin Schaps and David Holmes)

Trending On Reuters