An arm of state-owned conglomerate China Merchants Group has made a $3.4 billion takeover bid for Chindata Group Holdings Ltd., setting up a bidding war for the Asian data center operator.
China Merchants Capital Holdings (International) Ltd. made a non-binding offer of $9.20 in cash per American depositary share, according to a statement Monday. The bid compares to a rival offer of $8 per ADS from Bain Capital.
Beijing-based Chindata’s shares rose 12.3% Monday in US trading, their highest level since February. The company’s sole outstanding dollar bond maturing in 2026 jumped 3.5 cents to 100.2 cents on the dollar, according to Bloomberg-compiled prices as of 10:40 a.m. in Hong Kong.
The company said last month a special board committee had hired Citigroup Inc. as an adviser after it received a going-private proposal from Bain Capital, which already has a major stake in the company. Some analysts said at the time that a privatization makes sense but Bain’s offer was likely too low.
Bloomberg News reported late last year that China Merchants was exploring a potential bid for Chindata.
China Merchants said it views Chindata’s employees as instrumental to its success and plans to retain key staff to the extent possible. It plans to work closely with Chindata management to accelerate the next stage of its growth strategy and further unlock its capabilities as Asia’s leading data center platform, according to Monday’s statement.
Data centers have become hot assets among investors, in part due to the perception of their having stable returns, and expectations of ongoing growth as people increasingly rely on technology.
Chindata operates carrier-neutral data centers in locations including China, India and Malaysia, according to its website. Bain bought Chindata in 2019 from Wangsu Science & Technology Co. and merged it with its portfolio firm Bridge Data Centers. In 2020, Chindata raised $621 million through its US initial public offering.
--With assistance from Lorretta Chen.
(Updates with share and bond prices in third paragraph.)