Thursday, October 16, 2014

Equinix's Planned REIT Convervsion Yields $7.57 Dividend

In conjunction with its previously announced conversion to a real estate investment trust (REIT), Equinix announced a special distribution of $416.0 million, or approximately $7.57 per share based on the number of shares currently outstanding, to its common stockholders.

"Today's announcement marks an important step on our path to becoming a REIT. The declaration of the special distribution aligns with our expectations that we will begin operating as a REIT on January 1, 2015," said Steve Smith, president and CEO of Equinix. "We have finished a major milestone with the completion of the financial system conversion in Q3, and we are in active dialogue with the IRS about our pending Private Letter Ruling request. We are pleased with the current momentum, and we expect to receive a favorable PLR in 2014."  

For Equinix to be eligible to qualify for taxation as a REIT for federal income tax purposes effective for its taxable year commencing January 1, 2015, Equinix must distribute, on or before December 31, 2015, its previously undistributed accumulated earnings and profits attributable to all taxable periods ending prior to January 1, 2015 (the "Pre-2015 Accumulated E&P"). Equinix expects that the value of the 2014 Special Distribution, plus the expected value of the deemed distribution on account of the adjustment to the conversion rate relating to Equinix's outstanding 4.75% Convertible Subordinated Notes due June 15, 2016 (the "2016 Convertible Notes") that will be made as a result of the 2014 Special Distribution (the "2014 Conversion Rate Adjustment"), will exceed Equinix's Pre-2015 Accumulated E&P.

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