Regional telco Cincinnati Bell is preparing to sell-down its stake in subsidiary CyrusOne after spinning out and listing the data centre unit last year.
Under the plan CyrusOne will offer 12.5 million common shares in a public offering, and will then…
Regional telco Cincinnati Bell is preparing to sell-down its stake in subsidiary CyrusOne after spinning out and listing the data centre unit last year.
Under the plan CyrusOne will offer 12.5 million common shares in a public offering, and will then use the proceeds to acquire 12.5 million common units from Cincinnati Bell, which currently owns 69% of the unit.
Cincinnati Bell expects to be left with 49% of CyrusOne after the transaction. This percentage could fall to 46.1% as the underwriters have an option to purchase a further 1.875 million CyrusOne shares, which would see Cincinnati Bell dilute its stake further.
The joint-bookrunners on the offering are Citigroup, BofA Merrill Lynch, Barclays, Deutsche Bank and Morgan Stanley. In addition Cantor Fitzgerald, Evercore, KeyBanc Capital Markets, Stephens and UBS are acting as co-managers.
CyrusOne’s common stock opened at US$22.88 following the announcement. It expects to close the offering on 27 June.
Cincinnati Bell listed the unit in January 2013, selling just shy of 19 million shares in its subsidiary for US$19 a piece to raise US$360m.
CyrusOne operates as a real estate investment trust (Reit), which receive special tax considerations and typically offer investors high yields as they have to distribute a minimum of 90% of their taxable profits as dividends.
It owns 25 data centres, 23 of which are in the US. The other two are in London and Singapore.
