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Digital Realty Announces Tender Offer and Consent Solicitation for 5.875% Senior Notes due 2021 issued by DuPont Fabros Technology, L.P.
August 30, 2017
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SAN FRANCISCO, Aug. 30, 2017 /PRNewswire/ -- Digital Realty (NYSE:DLR, news, filings), a leading global provider of data center, colocation and interconnection solutions, announced today that Penguins OP Sub, LLC (the "Offeror"), an indirect subsidiary of Digital Realty Trust, Inc. has commenced a cash tender offer for any and all of the $600,000,000 aggregate outstanding principal amount of the 5.875% Senior Notes due 2021 issued by DuPont Fabros Technology, L.P. (the "Issuer") (CUSIP No. 26613TAE0) (the "Notes") and a related consent solicitation (together, the "Tender Offer and Consent Solicitation") to effect certain amendments (the "Proposed Amendments") to the indenture governing the Notes (the "Indenture") that would eliminate substantially all of the restrictive covenants and certain events of default and related provisions contained in the Indenture and shorten the minimum advance notice requirement to the Holders prior to a redemption to two business days, which Proposed Amendments would be contained in a supplemental indenture (the "Supplemental Indenture") to the Indenture. DuPont Fabros Technology, Inc. ("DFT") has a controlling interest in the Issuer and collectively with Issuer and their operating subsidiaries is referred to as the "Company".
The Tender Offer and Consent Solicitation are being conducted in connection with a previously announced merger agreement between Digital Realty and DFT and certain of their subsidiaries, pursuant to which, among other things, the Offeror will merge into the Issuer (the "Mergers"). The Offeror's obligation to accept for purchase and payment, and to purchase and pay for, tendered Notes and delivered consents pursuant to the Tender Offer and Consent Solicitation is subject to certain conditions, including the condition that the Company has completed the Mergers (the "Merger Condition").
Holders who tender their Notes will be deemed to consent to all of the Proposed Amendments, and holders may not deliver consents without tendering their Notes. The Tender Offer and Consent Solicitation is being made pursuant to the Offer to Purchase and Consent Solicitation Statement, dated August 30, 2017, and a related Consent and Letter of Transmittal (together, the "Offer Documents"), which more fully set forth the terms and conditions of the Tender Offer and Consent Solicitation. The Tender Offer and Consent Solicitation will expire at 11:59 p.m., New York City time, on September 27, 2017 unless extended or earlier terminated by us in our sole discretion (such date and time, as may be extended or earlier terminated, the "Expiration Date"). Holders who validly tender their Notes and deliver their consents to the Proposed Amendments at or prior to 5:00 p.m., New York City time, on September 13, 2017 (as such date and time may be extended by the Offeror in its sole discretion, the "Consent Payment Deadline") and do not withdraw their Notes or revoke their consents at or prior to 5:00 p.m., New York City time, on September 13, 2017 (as such date and time may be extended by the Offeror in its sole discretion, the "Withdrawal Deadline"), and whose Notes are accepted for purchase, will receive $1,032.50 per $1,000 principal amount of tendered Notes (the "Total Consideration"), which amount includes a consent payment of $30 per $1,000 principal amount of Notes (the "Consent Payment"), plus any accrued and unpaid interest from and including the most recent interest payment date for the Notes, and up to, but excluding, the applicable settlement date.
Holders of the Notes who validly tender their Notes after the Consent Payment Deadline, but at or prior to the Expiration Date, and whose Notes are accepted for purchase, will receive $1,002.50 per $1,000 principal amount of Notes, plus any accrued and unpaid interest from and including the most recent interest payment date for the Notes, and up to, but excluding, the applicable settlement date. Holders of Notes tendered after the Consent Payment Deadline will not receive a consent payment. Holders tendering Notes after the Consent Payment Deadline and at or prior to the Expiration Date will only be eligible to receive the Tender Offer Consideration, defined as the Total Consideration less the Consent Payment.
If the Offeror receives valid consents of the holders of a majority in aggregate principal amount of the outstanding Notes (the "Requisite Consents") and the Offeror pays for all Notes and Consents validly delivered (and not validly revoked) pursuant to the Tender Offer and Consent Solicitation, the Issuer and the Trustee are expected to execute the Supplemental Indenture in respect of the Notes on or promptly following the receipt of the Requisite Consents.
The Offeror reserves the right, but is under no obligation, on any day following the Consent Payment Deadline and prior to the Expiration Date (the "Early Settlement Date"), to accept for purchase any Notes validly tendered prior to the Early Settlement Date (and not withdrawn at or prior to the Withdrawal Deadline), subject to satisfaction or waiver of the conditions to the Tender Offer and Consent Solicitation.
The Tender Offer and Consent Solicitation is subject to a number of conditions that are set forth in the Offer Documents, including, without limitation, the Merger Condition. There can be no assurance that the Merger Condition, or any other condition to the Tender Offer and Consent Solicitation, will be satisfied. If any of the conditions are not satisfied, the Offeror is not obligated to accept for payment, purchase or pay for, and may delay the acceptance for payment of, any tendered Notes or delivered consents and may terminate the Tender Offer and Consent Solicitation.
The Issuer intends to call for redemption any and all Notes not tendered in the Tender Offer and Consent Solicitation, and, at the time such Notes are called for redemption, the Issuer may effect the satisfaction and discharge of the Indenture.
The Offeror expressly reserves the right, subject to applicable law, to terminate the Tender Offer and Consent Solicitation.
The Offeror has engaged Citigroup Global Markets Inc. as Dealer Manager and Solicitation Agent for the Tender Offer and Consent Solicitation. Persons with questions regarding the Tender Offer and Consent Solicitation should contact Citigroup Global Markets Inc. at (212) 723-6106 (Collect) or (800) 558-3745 (Toll Free). Requests for copies of the Offer Documents or documents relating to the Tender Offer and Consent Solicitation may be directed to Global Bondholder Services Corporation, the Tender Agent and Information Agent, at (866) 924-2200.
This press release does not constitute a notice of redemption under the optional redemption provisions of the Indenture or an obligation to issue a notice of redemption in respect of the Notes. Any redemption would be made solely pursuant to the notice of redemption, including subject to the conditions set forth therein, delivered pursuant to the Indenture and the information in this press release is qualified in its entirety by such notice. This press release does not constitute an offer to sell, or a solicitation of an offer to buy, the Notes, nor does it constitute a solicitation of consents to amend the related Indenture. The Tender Offer and Consent Solicitation is made solely pursuant to the Offer Documents. The Tender Offer and Consent Solicitation is not being made to holders of Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.
Holders are urged to read the Offer Documents and related documents carefully before making any decision with respect to the Tender Offer and Consent Solicitation. Holders of Notes must make their own decisions as to whether to tender their Notes and provide the related consents. None of the Offeror, Digital Realty, DFT, the Dealer Manager and Solicitation Agent, the Information Agent, the Tender Agent or the Trustee for the Notes makes any recommendations as to whether holders should tender their Notes or provide the related consents pursuant to the Tender Offer and Consent Solicitation, and no one has been authorized to make such a recommendation.
About Digital Realty
Digital Realty supports the data center, colocation and interconnection strategies of more than 2,300 firms across its secure, network-rich portfolio of data centers located throughout North America, Europe, Asia and Australia. Digital Realty's clients include domestic and international companies of all sizes, ranging from financial services, cloud and information technology services, to manufacturing, energy, gaming, life sciences and consumer products. https://www.digitalrealty.com/
Penguins OP Sub, LLC is a subsidiary of Digital Realty.
For Additional Information:
Andrew P. Power
Chief Financial Officer
John J. Stewart / Maria S. Lukens
Additional Information and Where to Find It
On August 15, 2017, Digital Realty filed a proxy statement/prospectus in connection with the Mergers. Investors and our stockholders are urged to read carefully the proxy statement/prospectus and other relevant materials because they contain important information about the Mergers. Investors and stockholders may obtain free copies of these documents and other documents filed by Digital Realty with the SEC through the web site maintained by the SEC at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by Digital Realty by going to our corporate website at www.digitalrealty.com or by directing a written request to: Digital Realty Trust, Inc., Four Embarcadero Center, Suite 3200, San Francisco, CA 94111, Attention: Investor Relations. Investors and security holders are urged to read the proxy statement/prospectus and the other relevant materials before making any voting decision with respect to the Mergers.
Interests of Participants
Digital Realty and its directors and executive officers and DFT and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Digital Realty and DFT in connection with the proposed transaction. Information regarding the special interests of these directors and executive officers in the Mergers is included in the proxy statement/prospectus referred to above.
This press release contains forward-looking statements which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially, including statements related to the conditions of the Tender Offer and Consent Solicitation, the Mergers, certain dates and public announcements, any redemption of the untendered Notes that may be made or satisfaction and discharge of the Indenture that may occur. These risks and uncertainties include, among others, the following: the impact of current global economic, credit and market conditions; current local economic conditions in the metropolitan areas in which we operate; decreases in information technology spending, including as a result of economic slowdowns or recession; adverse economic or real estate developments in our industry or the industry sectors that we sell to (including risks relating to decreasing real estate valuations and impairment charges); our dependence upon significant tenants; bankruptcy or insolvency of a major tenant or a significant number of smaller tenants; defaults on or non-renewal of leases by tenants; our failure to obtain necessary debt and equity financing; risks associated with using debt to fund our business activities, including re-financing and interest rate risks, our failure to repay debt when due, adverse changes in our credit ratings or our breach of covenants or other terms contained in our loan facilities and agreements; financial market fluctuations; changes in foreign currency exchange rates; our inability to manage our growth effectively; difficulty acquiring or operating properties in foreign jurisdictions; our failure to successfully integrate and operate acquired or developed properties or businesses; the suitability of our properties and data center infrastructure, delays or disruptions in connectivity, failure of our physical and information security infrastructure or services or availability of power; risks related to joint venture investments, including as a result of our lack of control of such investments; delays or unexpected costs in development of properties; decreased rental rates, increased operating costs or increased vacancy rates; increased competition or available supply of data center space; our inability to successfully develop and lease new properties and development space; difficulties in identifying properties to acquire and completing acquisitions; our inability to acquire off-market properties; the impact of the United Kingdom's referendum on withdrawal from the European Union on global financial markets and our business; our inability to comply with the rules and regulations applicable to reporting companies; our failure to maintain our status as a REIT; possible adverse changes to tax laws; restrictions on our ability to engage in certain business activities; environmental uncertainties and risks related to natural disasters; losses in excess of our insurance coverage; changes in foreign laws and regulations, including those related to taxation and real estate ownership and operation; and changes in local, state and federal regulatory requirements, including changes in real estate and zoning laws and increases in real property tax rates. For a further list and description of such risks and uncertainties, see the reports and other filings by the company with the U.S. Securities and Exchange Commission, including the Digital Realty's Annual Report on Form 10-K for the year ended December 31, 2016 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017 and June 30, 2017. Digital Realty disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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SOURCE Digital Realty