US telco Cincinnati Bell is further reducing its stake in CyrusOne via the data centre operator’s public share offering.
The move will see Cincinnati Bell’s stake in CyrusOne, which it spun off in 2013, drop to 11.3% if underwriters exercise their…
US telco Cincinnati Bell is further reducing its stake in CyrusOne via the data centre operator’s public share offering.
The move will see Cincinnati Bell’s stake in CyrusOne, which it spun off in 2013, drop to 11.3% if underwriters exercise their greenshoe option, or 13.7% if they choose not to do so.
Specifically, Cincinnati Bell plans to sell 4.3 million operating partnership units, plus an extra 1.695 million if the greenshoe option is exercised, to CyrusOne. Operating partnership units are exchangeable into CyrusOne common shares on a one-for-one basis.
CyrusOne yesterday launched an offering of 11.3 million shares and granted the underwriters an option to buy up to 1.695 million additional shares.
CyrusOne will use proceeds to help fund its previously announced US$400m purchase of data centre owner and operator Cervalis Holdings. A portion will also be used to acquire the operating partnership units from Cincinnati Bell.
Joint bookrunners for CyrusOne’s public offering are Citigroup, Goldman Sachs, Morgan Stanley, KeyBanc Capital Markets, Barclays, JP Morgan, Deutsche Bank Securities, RBC Capital Markets, TD Securities and Jefferies. Co-managers are Stifel, SunTrust Robinson Humphrey and Raymond James.
Cincinnati Bell created CyrusOne in 2013 when it put its data centre assets into a new company that would operate as a tax-efficient real estate investment trust. REITs receive special tax considerations and typically offer investors high yields as they have to distribute at least 90% of their taxable profits as dividends.
Cincinnati Bell initially retained 69% of CyrusOne, but reduced its ownership to 43.7% in June 2014 and to 21.7% in April 2015.
