Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Back on the <a href="https://investor.chindatagroup.com/static-files/cb5912cf-662a-4900-8c41-751c53513ef4" target="_blank" rel="noopener">11 August</a>, Chinese data center provider <a href="https://www.smartkarma.com/entities/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata Group (CD US)</a> and major shareholder Bain Capital entered into a definitive agreement at US$8.60/ADS.</li>
<li>The EGM was held yesterday, the 4 December, and the merger was approved by 97.75% of the total votes cast. No specific PRC regulatory approval is needed for this merger. </li>
<li>All good right? Not quite. There's still the nagging issue involving 22.79% of shares out objecting to the deal, exceeding the 12% dissenting threshold, a condition to the merger. </li>
</ul>


Back on the 11 August, Chinese data center provider Chindata Group (CD US) and major shareholder Bain Capital entered into a definitive agreement at US$8.60/ADS.
The EGM was held yesterday, the 4 December, and the merger was approved by 97.75% of the total votes cast. No specific PRC regulatory approval is needed for this merger. 
All good right? Not quite. There's still the nagging issue involving 22.79% of shares out objecting to the deal, exceeding the 12% dissenting threshold, a condition to the merger. 


Dissenters Mobilise As Chindata (CD US)'s Shareholders Approve Bain's Offer

<ul>
<li>Back on the 7 June, <a href="https://www.smartkarma.com/entities/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata Group (CD US)</a> announced Bain Capital's NBIO to buy all shares of the Chinese data center provider it does not already own for $8/ADS.</li>
<li>On the <a href="https://investor.chindatagroup.com/news-releases/news-release-details/chindata-group-receives-non-binding-take-private-proposal-cmc" target="_blank" rel="noopener">13 July</a>, Chindata announced that China Merchants Capital has made an NBIO at $9.20/ADS.</li>
<li>Now Bain has entered into a definitive agreement with Chindata at US$8.60/ADS. Bain holds more than 2/3s of Chindata to vote this through. And there is no PRC regulator approval.</li>
</ul>


Back on the 7 June, Chindata Group (CD US) announced Bain Capital's NBIO to buy all shares of the Chinese data center provider it does not already own for $8/ADS.
On the 13 July, Chindata announced that China Merchants Capital has made an NBIO at $9.20/ADS.
Now Bain has entered into a definitive agreement with Chindata at US$8.60/ADS. Bain holds more than 2/3s of Chindata to vote this through. And there is no PRC regulator approval.


<ul>
<li>My read of Bain's Offer last month, was a tactic to flesh out a competing Offer.  It seemed unlikely Bain would get the regulatory approval to take <a href="https://www.smartkarma.com/entities/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata (CD US)</a> private. </li>
<li>Now state-backed China Merchants Capital Holdings International Ltd. has made a non-binding offer of $9.20/ADS, compared to $8/ADS from Bain.</li>
<li>This Offer is indicative. But an SOE taking over data centres makes a lot of sense. </li>
</ul>


My read of Bain's Offer last month, was a tactic to flesh out a competing Offer.  It seemed unlikely Bain would get the regulatory approval to take Chindata (CD US) private. 
Now state-backed China Merchants Capital Holdings International Ltd. has made a non-binding offer of $9.20/ADS, compared to $8/ADS from Bain.
This Offer is indicative. But an SOE taking over data centres makes a lot of sense. 


Chindata: Bain's Move Spurs China Merchants Into Action

<ul>
<li>Chinese data centre outfit <a href="https://www.smartkarma.com/entities/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata (CD US)</a> has no end of alleged suitors, rumoured to include SOE-backed China Merchants, <a href="https://www.smartkarma.com/entities/gds-holdings-adr" target="_blank" data-smartkarma-citation="entities:23649:1" rel="noopener">GDS (GDS US)</a>, PE outfit PAG, and <a href="https://www.smartkarma.com/entities/eqt-ab" target="_blank" data-smartkarma-citation="entities:28922:1" rel="noopener">EQT (EQT SS)</a>-backed EdgeConneX.</li>
<li>Now Bain Capital, Chindata's largest shareholder with 42.17% (and 87.39% of the voting power) has made a non-binding proposal of $8/share per ADS, a 33% premium to last close.</li>
<li>Chindata's board has made no decision on the proposal. It's hardly a knockout Offer. But the key question is whether Bain will get regular approval to take Chindata private. </li>
</ul>


Chinese data centre outfit Chindata (CD US) has no end of alleged suitors, rumoured to include SOE-backed China Merchants, GDS (GDS US), PE outfit PAG, and EQT (EQT SS)-backed EdgeConneX.
Now Bain Capital, Chindata's largest shareholder with 42.17% (and 87.39% of the voting power) has made a non-binding proposal of $8/share per ADS, a 33% premium to last close.
Chindata's board has made no decision on the proposal. It's hardly a knockout Offer. But the key question is whether Bain will get regular approval to take Chindata private. 


<ul>
<li>Bain Capital-backed <a href="https://www.smartkarma.com/entities/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata Group (CD US)</a> is on the move after Bloomberg flagged - again - interest from industry players.</li>
<li>This time, SOE-backed China Merchants Group is understood to be mulling a takeover of Chindata. Shares are up 23% since that article earlier this month.</li>
<li>Back in April, Bloomberg mentioned <a href="https://www.smartkarma.com/entities/gds-holdings-adr" target="_blank" data-smartkarma-citation="entities:23649:1" rel="noopener">GDS Holdings (ADR) (GDS US)</a>, PE outfit PAG, and <a href="https://www.smartkarma.com/entities/eqt-ab" target="_blank" data-smartkarma-citation="entities:28922:1" rel="noopener">EQT AB (EQT SS)</a>-backed EdgeConneX were rumoured to be interested in merging with Chindata. </li>
</ul>


Bain Capital-backed Chindata Group (CD US) is on the move after Bloomberg flagged - again - interest from industry players.
This time, SOE-backed China Merchants Group is understood to be mulling a takeover of Chindata. Shares are up 23% since that article earlier this month.
Back in April, Bloomberg mentioned GDS Holdings (ADR) (GDS US), PE outfit PAG, and EQT AB (EQT SS)-backed EdgeConneX were rumoured to be interested in merging with Chindata. 


Chindata: China Merchants Potentially In The Mix

China

Wangsu Science & Technology Co., Ltd. provides online business solutions in China. The Company also provides Content Delivery Network (CDN), and Internet Data Centers (IDC).

Shanghai Wangsu Science & Technology Co (300017 CH)

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Shanghai Wangsu Science & Technology Co (300017 CH)

Dissenters Mobilise As Chindata (CD US)'s Shareholders Approve Bain's Offer

This is done. Trading at a 2% gross spread to terms, or ~14% annualised assuming late-Jan completion. Not bad. Not great. It was certainly more...

David Blennerhassett

Chindata Backs Bain's Revised Terms

Chindata is still cheap. But Bain & Co have the necessary votes to push this through. Trading at a 6% gross spread to terms, or ~13% annualised...

David Blennerhassett

Chindata: Bain's Move Spurs China Merchants Into Action

A unit of China Merchants is the right vehicle for this Offer. Trading at a 13.1% gross spread to terms, which is indicative of the non-binding...

David Blennerhassett

Is Bain Permitted To Take Over Chindata?

Trading at a 15.3% gross spread to terms, which is indicative of the non-binding nature of the Offer, and what might be involved in the due...

David Blennerhassett

Chindata: China Merchants Potentially In The Mix

No formal sale process has occurred, therefore second-guessing if, and when, an Offer emerges will be fraught with issues. However, I'd be picking...

David Blennerhassett

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