China Merchants bids on Chinese data centre to challenge Bain

chindata

A subsidiary of the state-owned China Merchants Group has initiated a takeover bid worth US$3.4 billion (HK$26.5 billion) for Chindata Group Holdings, triggering a bidding war for the Asian data centre operator. The group has made a non-binding offer of US$9.20 in cash per American depositary share. This bid surpasses the rival offer of US$8 per share from US private equity firm Bain Capital.

Following the announcement, Chindata’s shares experienced a 12.3% increase in US trading, reaching their highest level since February. Last month, Chindata disclosed that a special board committee had engaged Citigroup as an advisor after receiving a proposal from Bain Capital to take the company private. Bain Capital already holds a significant stake in Chindata.

Data centres have become attractive assets among investors, in part due to the perception of their having stable returns, and the expectation of ongoing growth fuelled by increasing reliance on technology. Chindata operates carrier-neutral data centres in various locations, including China, India, and Malaysia, according to its website.

Bain Capital acquired Chindata in 2019 from Wangsu Science & Technology and merged it with its portfolio company, Bridge Data Centres. In 2020, Chindata successfully raised US$621 million through its initial public offering in the United States.

Chindata has dedicated significant resources to advancing environmentally-friendly and efficient solutions throughout the entire life cycle of data centres, covering areas such as site selection, construction, and operations. The company has made notable strides in developing cutting-edge, carbon-friendly innovations, including the modularisation of essential structures and components.

Earlier, Wu Huapeng, CEO of Chindata had said: “Chindata is the first in the industry to propose a 100% renewable energy target and a carbon neutral roadmap, focusing on green site selection, green construction, green operation, and a zero-carbon strategy. We will strive to adhere to the green and sustainable targets we have set for ourselves and contribute to the national strategy of carbon neutrality to realise the net emission goals set out in the Paris Agreement and support a better future.”

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