GDS Holdings Limited, China’s leading data center developer and operator, is said to be considering selling a minority stake in its international business for about $300 million to $400 million to a strategic partner.
According to the people familiar with the matter, the company is working with an adviser and is weighing selling about a 30% to 40% stake in the assets. Investment firms and sovereign wealth funds have expressed interest in the international portfolio.
However, deliberations are still ongoing, details could change and GDS could decide not to proceed with a stake sale; a representative for GDS didn’t immediately respond to requests for comment.
GDS’s American depositary shares have lost more than half their market value in the last 12 months, valuing the company at about $3.8 billion. It is also traded in Hong Kong and has considered a secondary listing in Singapore, Bloomberg News has reported.
Digital infrastructure has been a reliable source of dealmaker activity in Asia in recent months. PT Telkom Indonesia is considering introducing investors into its data center business and could seek a valuation of more than $1 billion for the operation.
Thailand’s biggest banks are considering a stake sale in Supernap Thailand that could value it at about $800 million, Bloomberg News reported last year.
GDS and ST Telemedia Global Data Centres suffered security breaches two years ago affecting about 2,000 customers including Wells Fargo & Co. and an arm of China’s central bank, according to cybersecurity firm Resecurity Inc. GDS said a customer support website was breached in 2021, and both companies said the break didn’t pose a risk to clients’ IT systems or data.
Moreover, GDS competes with companies such as BDx in Hong Kong. Earlier this month, Big Data Exchange (BDx), the fastest growing carrier-neutral data center platform in Asia-Pacific, announced its plan to develop a new 16MW facility named “HKG8” in the upcoming high-tech industrial area being developed by Sino Group, a leading property developer in Hong Kong.
By the end of 2023, BDx hopes to have the hyperscale-ready data center fully operational. This will be the fourth data center for BDx in Hong Kong, and it will be in the district’s Kwai Chung, which is quickly evolving into a highly sought-after industrial and commercial zone. 26 kilometers from the Hong Kong airport and 5 kilometers from the closest port separate the data center’s strategic location.