{"id":356087,"date":"2023-08-14T19:00:52","date_gmt":"2023-08-14T11:00:52","guid":{"rendered":"https:\/\/www.mingtiandi.com\/?p=356087"},"modified":"2023-08-14T21:11:56","modified_gmt":"2023-08-14T13:11:56","slug":"bain-buying-back-data-centre-operator-chindata-in-3-2b-deal","status":"publish","type":"post","link":"https:\/\/www.mingtiandi.com\/real-estate\/data-centres\/bain-buying-back-data-centre-operator-chindata-with-sweetened-316b-deal\/","title":{"rendered":"Bain Buying Back Data Centre Operator Chindata with Sweetened $3.2B Deal"},"content":{"rendered":"
\"Chindata

Huapeng Wu was named CEO of Chindata in February<\/p><\/div>\n

Chindata Group Holdings announced Friday that it is set to go private after the company\u2019s board agreed to a sweetened $3.16 billion from Bain Capital, ending a bidding war between the US private equity titan and state-backed China Merchants Capital.<\/p>\n

Bain, which is the Beijing-based data centre operator\u2019s largest shareholder, entered into a definitive agreement with the NASDAQ-listed company to acquire the shares it does not already own in the firm for $4.30 per ordinary share or $8.60 per American depositary share (ADS) in cash, according to a regulatory filing<\/a> on Friday.<\/p>\n

\"Altus<\/a><\/div><\/p>\n

The deal, which values the company at $3.16 billion, represents a 7.5 percent increase from Bain\u2019s initial June offer<\/a> of $8 per ADS or $2.9 billion, but falls short of China Merchants Capital\u2019s\u00a0 $9.20 per ADS bid.<\/p>\n

Bain\u2019s revised offer remains \u201cunattractive\u201d for shareholders, according to Arun George, analyst and co-founder of Global Equity Research in London. However, with Bain already owning 44.55 percent of the outstanding shares and 92.34 percent of the voting rights in Chindata, the conditions for completion of the deal are likely to be met.<\/p>\n

China Data Centres Suffer on US Exchanges<\/h3>\n

\u201cChindata Group exemplifies Bain Capital\u2019s unique ability to identify attractive investment opportunities across the Asia-Pacific region,\u201d said Jonathan Zhu, partner and co-head of Asia private equity at Bain. \u201cWe believe taking Chindata Group private is the best way to provide attractive returns to existing public shareholders and secure the long-term success of the company.\u201d<\/p>\n

\"Jonathan

Jonathan Zhu, partner and co-head of Asia private equity at Bain Capital<\/p><\/div>\n

The firm said its latest offer represents a 42.6 percent premium to the closing price on the last trading day before Bain laid out its preliminary offer on June 6, and around 48.7 percent higher than the 30-day volume-weighted average trading price of the ADSs.<\/p>\n

The take-private deal comes nearly three years after Bain led Chindata\u2019s $540 million IPO<\/a> in October 2020, with backing from institutional investors APG, BlackRock and the Canada Pension Plan Investment Board.<\/p>\n

Chindata\u2019s stock had been on a nearly uninterrupted decline since March 2021 with shares soon falling to under $5 each after the company announced in December that year<\/a> that its founder and CEO Alex Ju Jing was leaving immediately. That departure was announced one month after Yiming Zhang, the founder of the data centre operator\u2019s primary customer, ByteDance, stepped down from his chairman role and left the board of the parent company of TikTok.<\/p>\n

\"\"<\/a><\/p>\n

Even before Chindata\u2019s CEO departure investors had been dumping US listed shares of Chinese data centre operators following a Beijing crackdown on the country\u2019s tech sector.<\/p>\n

ADS for VNET, a Blackstone-backed Chindata competitor, have fallen from nearly $42 each in February 2021 to $2.93 cents on Monday, while NASDAQ-listed ADS for GDS Holdings, China\u2019s most established data centre operator, slid from over $115 in February 2021 to $11.13 each on Monday.<\/p>\n

Under the agreement approved by Chindata\u2019s board, the operator will be delisted from the NASDAQ and become a wholly owned subsidiary of Bain once the deal is closed towards the end of the year or in the first quarter of 2024.<\/p>\n

Bain plans to fund its Chindata buyback through a mix of cash contribution from sponsors, debt and equity rollover by existing shareholders.<\/p>\n

\u201cOur deep partnership with Bain Capital has been an essential element of our success, and we look forward to building on this track record together and continuing to provide best-in-class services to our customers in the future,\u201d said ChinData Group CEO Huapeng Wu.<\/p>\n

Offer Underwhelms<\/h3>\n

Bain is likely to meet the conditions need to complete the deal as the stake held by the company, as including its own shareholding, the company has now won approval from owners of 65.67 percent of Chindata\u2019s outstanding shares and 95.26 percent of the company\u2019s voting rights, which is enough to ensure shareholder approval, according to a note by George, published on Smartkarma<\/a>.<\/p>\n

\"\"<\/a><\/p>\n

CMC\u2019s July proposal, while higher in value, cannot be declared a superior offer since a tenderer has to own at least half of any class of shares in the company, and Bain stood firm that it would not sell shares to any third party, he said.<\/p>\n

Bain\u2019s latest deal is still \u201cunderwhelming\u201d according to George since the revised offer of $8.60 per ADS is still a 16 percent discount to the average share price since the IPO, or 36 percent less than Chindata\u2019s IPO price of $13.50 per share.<\/p>\n

Chindata\u2019s revenues jumped 56.8 percent year on year to RMB 1.44 billion ($200 million) in the first quarter of the year, resulting in a 167.5 percent surge in net income during the same period.<\/p>\n

The pan-Asian hyperscale data centre platform has a total capacity of 898 megawatts across China, India and Malaysia by the end of March, up by 27MW from a year ago.<\/p>\n","protected":false},"excerpt":{"rendered":"

Chindata Group Holdings announced Friday that it is set to go private after the company\u2019s board agreed to a sweetened $3.16 billion from Bain Capital, ending a bidding war between the US private equity titan and state-backed China Merchants Capital.<\/p>\n

… Read More>><\/a><\/p>\n","protected":false},"author":12201,"featured_media":356089,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[8733],"tags":[1140,4,8420,6441,5391],"ppma_author":[8848],"authors":[{"term_id":8848,"user_id":12201,"is_guest":0,"slug":"beatrice-laforga","display_name":"Beatrice Laforga","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/d4be689d8f5a82939d685df6ef171fcb?s=96&d=mm&r=g","user_url":"","last_name":"Laforga","first_name":"Beatrice","description":""}],"_links":{"self":[{"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/posts\/356087"}],"collection":[{"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/users\/12201"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/comments?post=356087"}],"version-history":[{"count":0,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/posts\/356087\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/media\/356089"}],"wp:attachment":[{"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/media?parent=356087"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/categories?post=356087"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/tags?post=356087"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/ppma_author?post=356087"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}