NextDC shares surge 42% as Goodman and Digital Realty raid the register
An after-hours raid at $9.50 has erased last month's downgrade losses in a morning – but the buyers say a takeover isn't on the table, yet.
Source: Shutterstock
Mentioned
KEY POINTS
- NextDC shares lost 41.7% in a single session last month after a power delay at its Melbourne M3 campus forced a deep cut to FY27 guidance and a pause on new developments, sending the stock to an eight-year low.
- Late yesterday, a vehicle owned equally by Goodman Group and Digital Realty raided the register via an aftermarket bookbuild, offering $9.50 a share for up to 9.9% of the company – a 45.5% premium to Wednesday's close.
- We unpack the bookbuild, why the timing looks opportunistic, whether a full takeover is likely, and the substantial holder disclosures and Australian takeover rules that will dictate the next move for NXT.
NextDC (NXT) shares are up 42% in morning trade after Goodman Group (GMG) and NYSE-listed Digital Realty (DLR) bought into the embattled data centre operator overnight. The move retraces the entire downgrade-driven sell-off, even though the buyers insist a takeover isn't on the cards – for now.
As reported late yesterday by the Australian Financial Review, JPMorgan crossed 57.25 million NXT shares, about 7.5% of the company, before this morning's open on behalf of Ackland Investments No.1 Trust, a vehicle owned 50-50 by GMG and DLR. Hedge funds crowded the book, but long-only holders were reluctant sellers despite the premium. That suggests much of the stock came from the short side – funds selling into the book at $9.50 rather than risk being caught in a squeeze should a corporate action unfold.
%20chart%205%20November%202026.%20Source%20Market%20Index.png)
NEXTDC Ltd (NXT) chart 5 November 2026. Source: Market Index
In a statement released at 9:59am AEDT, NXT's board labelled the raid "an opportunistic move", noting it came two weeks after the M3 downgrade and was open only to institutions. The company said it doesn't know the raid's outcome, holds no takeover proposal, and has appointed Barrenjoey and UBS as joint lead financial advisers. The buyers have told investors they have "no intention of submitting a control proposal or making a takeover bid" at this time, while reserving the right to do so.
The board has a point. NXT last traded at $9.18 before the halt preceding its downgrade, so GMG and DLR are paying little more than the pre-downgrade price for a strategic foothold. For management, though, today's move will come as a relief – the takeover premium now built into the share price has neatly filled the hole left by the downgrade, a fortnight out from the company’s November 20 AGM.
How we got here
The downgrade: On October 21, NXT cut FY27 underlying EBITDA guidance to $245–265 million from $385–410 million after electricity distributor Jemena suspended parts of its 66kV line works feeding M3. About $140 million of affected M3 contract revenue was removed from guidance, capex was trimmed to $4.5–5.0 billion, and a planning decision on M3 Stages 6 and 7 isn't expected until after the November 28 Victorian election. Liquidity stood at about $8.7 billion at September 30.
The buyers: GMG is the ASX's largest property group and has pivoted hard into digital infrastructure – data centres made up 78% of its $19.7 billion development book at its FY26 result, backed by a 6.4GW global power bank. Interestingly, its Q1 FY27 Operational Update, released this morning, made no mention of NXT. DLR ranks among the world's largest data centre REITs. The Austin-based trust operates more than 300 data centres across more than 55 cities in over 30 countries – including Sydney – giving it an existing foothold in the Australian market.
What's next
A substantial holder notice, due within two business days of crossing 5%, should reveal the pair's full holding. Commentary from GMG and DLR management will be scrutinised for any shift away from "at this time".
Last night’s move doesn’t necessarily flag a full bid. GMG and DLR may want only the powered sites and projects NXT has flagged it may sell – or the stake could simply be a blocking stake, making them kingmakers should a rival suitor emerge.
Keep in mind that under the Corporations Act, the pair can't move beyond 20% except via a takeover bid, a scheme of arrangement, or "creep" of up to 3% every six months. A bidder needs 90% to compulsorily acquire the remainder, so a stake near 10% – as targeted – gives the duo heavy influence over any rival bid or scheme vote.
One thing is certain: NXT shareholders will be pleased with today's move. October’s post-downgrade plunge had erased more than eight years of returns for long-term holders, leaving the stock around 70% below its July 2024 peak at the low. In markets, shareholders will take a win (or a reprieve) any way they can!
