Telecity Q1 Revenues Edges Down; Gets Cash And Share Offer From Equinix

(RTTNews) - Telecity Group Plc. (TCY.L), a European provider of carrier-neutral data centres, reported Thursday that its first-quarter revenues edged down 0.1 percent from last year. Underlying revenue growth was 9.6 percent, slightly ahead of management expectations. organic currency neutral or OCN revenue growth was 6.5 percent.

Adjusted EBITDA margin of 46.6 percent was down from last year's 46.8 percent.

John Hughes, Executive Chairman Telecity, said, "Whilst our first quarter reported results have been impacted by the strengthening of Sterling year-on-year, our underlying performance has been very encouraging. The good Q1 2015 order win performance along with significantly reduced levels of churn, particularly in the UK, means the Board is positive about the trajectory of the Group for the remainder of the year."

Further, the company continues to expect 8 percent - 10 percent revenue growth on an OCN basis for the full year, and stable EBITDA margin with slight downside pressure from investment.

Separately, TelecityGroup announced that it has received an approach from Equinix, Inc. (EQIX) regarding a possible offer for TelecityGroup at 1145 pence per share. The consideration would be payable in a mixture of cash and Equinix stock - approximately 54 percent of the consideration would be payable in cash and approximately 46 percent in Equinix stock.

Having carefully considered the Equinix proposal in the light of this exception, the Board of TelecityGroup has determined that it is required by virtue of its fiduciary duties to enter into discussions with Equinix and has decided to permit Equinix to undertake a short period of due diligence.

In response, Equinix confirmed that it is in preliminary discussions with the Board of TelecityGroup regarding a possible cash and share offer.