WHAT’S THE DEAL WITH PIN­NA­CLE AND DAT­A­CEN­TRIX?

Finweek English Edition - - SIMON SAYS -

Pin­na­cle’s sale of In­fra­sol to Dat­a­cen­trix goes a long way in help­ing Pin­na­cle with its debt is­sue, but per­haps it also shows the t wo com­pa­nies work­ing to­gether. This is a good deal con­sid­er­ing Pin­na­cle owns 33% of Dat­a­cen­trix and could maybe (I stress the maybe) see a merger of sorts be­tween the two com­pa­nies as op­posed to the ini­tial plan that ap­peared to be a takeover of Dat­a­cen­trix by Pin­na­cle. 36One owns 10% of Dat­a­cen­trix and 7.24% of Pin­na­cle. With Pin­na­cle al­most a third larger than Dat­a­cen­trix (and its 33% stake) it would not be a merger of equals but could solve the prob­lem Pin­na­cle ran into when its share price col­lapsed and it couldn’t con­clude the ex­pected of­fer to Dat­a­cen­trix mi­nori­ties us­ing high-val­ued Pin­na­cle shares. The takeover route is of course still open, al­beit a case of need­ing to raise debt rather than us­ing shares, but with Pin­na­cle’s debt sit­u­a­tion im­prov­ing it’s pos­si­ble. But why would Dat­a­cen­trix man­age­ment close the above deal if it only helps a takeover?

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