NEXTDC shares close above A$9.50 raid price after 51% jump

At a glance

• NEXTDC shares closed at A$9.85 on 5 November 2026, up about 51 per cent and above the A$9.50 a share Goodman Group and Digital Realty paid in their raid.

• Yarra Capital chairman Dion Hershan said NEXTDC had been trading at a 30 to 40 per cent discount to the replacement cost of the data centres it has already built.

• Data centres under construction are 79 per cent of Goodman's A$19.7 billion of development work, according to Goodman's 4 November ASX update.

• NEXTDC has appointed Cadence Advisory as independent financial adviser and Mallesons as legal adviser, alongside Barrenjoey and UBS.

• No substantial holding notice had been lodged by the close, so the exact stake is still to be confirmed.

NEXTDC shares closed at A$9.85 on 5 November, up about 51 per cent, ASX data shows. Goodman Group and Digital Realty had raided its share register the day before at A$9.50 a share. About 81.6 million NEXTDC shares traded, and Goodman's own shares rose 7.0 per cent to A$28.76.

Before the raid, NEXTDC traded well below the cost of rebuilding its data centres, says the chairman of Yarra Capital, a significant shareholder. Dion Hershan, chairman of Yarra Capital, called the share fall after NEXTDC's FY27 guidance cut an overreaction. Hershan said the fall left NEXTDC "at a 30 or 40 per cent discount to simply the replacement cost of what they've already built", the Australian Financial Review reported.

On our read, that made a stake in NEXTDC a cheaper way into data centres already running in Australia than building them. Goodman withdrew its A$1.2 billion Project Mars proposal at Lane Cove West on 28 September after residents and Lane Cove Council opposed it. NEXTDC M3 in Melbourne is waiting on more power after Jemena paused its pole works, and its shares closed 41.7 per cent lower on 21 October.

Chief executive Greg Goodman said on 4 November that community opposition and planning rules are getting harder for developers, the AFR reported. He also argued that the world needs data centres and Goodman has the money to build them. Data centres under construction are 79 per cent of Goodman's A$19.7 billion of development work, according to its 4 November ASX update.

Yarra Capital expects other bidders for NEXTDC

Yarra holds a significant stake in NEXTDC, and Hershan does not expect Goodman and Digital Realty to stay passive investors. "I'd be surprised if they're the only interested party," he said.

Macquarie analyst Andrew Gilles called a formal takeover proposal a "likely next step", the AFR reported. In his view, any bid would need approval from the Australian Competition and Consumer Commission and the Foreign Investment Review Board. Macquarie values NEXTDC's assets at about A$9.9 billion.

Jamie Hannah, deputy head of investments and capital markets at VanEck, sees the raid as good for existing investors, the AFR reported. Large technology companies are still funding data centre rollouts, in his view. "There is still scope for growth in the data centre market," he added.

The AFR puts Goodman and Digital Realty short of their 9.9 per cent target

Ackland Investments No.1, a vehicle owned in equal shares by Goodman and Digital Realty, ran an aftermarket book build on 4 November for up to 9.9 per cent of NEXTDC, according to NEXTDC's statement to the ASX. The book build was open only to institutional investors, and NEXTDC does not know the outcome.

The AFR's Street Talk column reported on the morning of 5 November that JPMorgan crossed 57.25 million shares, or 7.5 per cent, before the open. The newspaper's later report puts the stake at just under 8 per cent and values NEXTDC at A$7.2 billion at the raid price. A substantial holding notice, due within two business days of a holder passing 5 per cent, will give the exact figure. None was on the ASX by the close.

The pair's broker told investors during the book build that they have "no intention of submitting a control proposal or making a takeover bid for the Company at this time, but reserve their right to do so", according to NEXTDC.

NEXTDC appoints Cadence Advisory and Mallesons

NEXTDC's board called the raid "an opportunistic move" and holds no takeover proposal, according to the statement. "Any bona fide approaches will be considered by the Board on their merits and in the best interests of all NEXTDC shareholders," its statement reads.

Barrenjoey and UBS are its joint lead financial advisers, with Cadence Advisory as independent financial adviser and Mallesons as legal adviser. UBS is a new hire and Cadence specialises in takeover defence, the AFR reported.

A 9.9 per cent stake stays under the 10 per cent foreign investment line and the 20 per cent takeover line. Under the Corporations Act, a holder generally cannot lift its voting power above 20 per cent except through a takeover bid or another permitted route, law firm Allens explains. A foreign person may need to notify the Treasurer before taking a direct interest, generally 10 per cent or more, in a national security business, law firm Holding Redlich explains. Digital Realty, the foreign partner, has more than 300 data centres in more than 30 countries, according to its website. In Australia it runs five data centres in Sydney and Melbourne. NEXTDC holds Certified Strategic enclaves under the government's Hosting Certification Framework.

What to watch

• The substantial holding notice. It will give Ackland's exact holding and the dates of its purchases.

• The AGM on 20 November. NEXTDC shareholders meet after the board renewal announced on 26 October.

• A formal proposal. Any control proposal from Goodman and Digital Realty, or from another party, would go to the NEXTDC board.