8-KOther Events

DIGITAL REALTY TRUST, INC. 8-K Report, Corporate Update (Sep 1, 2017)

Filed September 1, 2017For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

This Form 8-K filing by Digital Realty Trust, Inc. (DLR) addresses updates related to its proposed merger with DuPont Fabros Technology, Inc. (DFT). The primary focus is on providing supplemental disclosures to the joint proxy statement/prospectus concerning the merger, primarily to address litigation filed by certain DFT stockholders. These lawsuits alleged material misstatements and omissions in the initial filings. DLR and DFT state they believe the claims are without merit but are making these disclosures to moot the allegations and avoid litigation expenses. The filing also includes updated financial projections for both DLR and DFT, as well as for the pro forma combined company, and details on the financial advisor's (Goldman Sachs) valuation analyses, including illustrative discounted cash flow and future stock price analyses. Key developments include the withdrawal of a motion for a preliminary injunction to block the merger by the plaintiffs in the litigation, following discussions regarding these supplemental disclosures. The merger vote for both DLR and DFT stockholders is scheduled for September 13, 2017. Investors should note that while supplemental disclosures are provided, the companies maintain that they are not legally required. The filing also confirms that A. William Stein will continue as CEO of the combined company, with most DFT executive officers not expected to remain in executive roles post-merger.

Key Highlights

  • 1Digital Realty Trust (DLR) and DuPont Fabros Technology (DFT) are filing supplemental disclosures to address litigation concerning their proposed merger.
  • 2The supplemental disclosures aim to moot allegations of materially incomplete and misleading statements in prior filings, according to the companies.
  • 3Plaintiffs in four class-action lawsuits have voluntarily withdrawn their motion for a preliminary injunction to block the merger.
  • 4Updated financial projections for DLR, DFT, and the pro forma combined entity are provided.
  • 5Details of Goldman Sachs' financial advisor analyses, including discounted cash flow and future stock price valuations, are elaborated upon.
  • 6The special meetings for DLR and DFT stockholders to vote on the merger are scheduled for September 13, 2017.
  • 7A. William Stein will remain CEO of the combined company post-merger; most DFT executive officers are not expected to continue in executive roles.

Frequently Asked Questions

DLR and DFT are filing these supplemental disclosures to address four class-action lawsuits filed by alleged DFT stockholders. These lawsuits claimed that the initial merger proxy statement/prospectus contained material misstatements and omissions. While DLR and DFT believe the claims are without merit, they are providing these additional disclosures to moot the allegations and avoid the expense and burden of litigation.

The plaintiffs in the class-action lawsuits have voluntarily withdrawn their motion for a preliminary injunction to block the merger. This withdrawal followed discussions between the parties regarding the supplemental disclosures provided in this filing. The companies maintain their belief that the claims are without merit.

The special meetings for both DLR stockholders and DFT stockholders to vote on the proposed merger are scheduled to be held on September 13, 2017.

This filing includes updated unaudited prospective financial information for DLR on a standalone basis, DFT on a standalone basis, and for the pro forma combined company. This includes projections for Adjusted EBITDA, Core FFO per Share, AFFO per Share, and Unlevered Free Cash Flows, as well as projected dividends per share and net debt plus preferred stock.