News Alert: MBK-led group considers to bid for VNET
- News reported that MBK Partners along with a partner are considering making a bid for VNET
- Considerations are preliminary without any details on the offer
- MBK-led group might need to compete with Hina Group and the Industrial Bank Co. Shanghai Branch
- Expect positive share price reaction as the bid interest implies VNET is deeply undervalued
What’s New
– Bloomberg news reported on 27 Jul 2022 that MBK Partners is in talks to team up with a partner on a joint offer for VNET (VNET US), according to people familiar with the matter.
– Considerations are preliminary with no offer details disclosed. No comment from MBK or VNET either.
– VNET previously received an unsolicited preliminary non-binding proposal letter from Hina Group and Industrial Bank Co., Ltd., Shanghai Branch to acquire all of its outstanding ordinary shares at US$8 per ADS on 11 Apr 2022.
Our View:
– Expect positive share price reaction. The bid interest from MBK-led group, along with the VNET’s previous proposal received on 11 Apr 2022, implies that VNET is deeply undervalued at the current c.5x FY22 EV/adj EBITDA.
– MBK-led group might need to compete with Hina Group and Industrial Bank Co., Shanghai Branch, which previously proposed to acquire VNET at US$8 per ADS. The proposed price is c.70% higher than the closed price on 26 Jul 2022.
– We currently rate BUY on the counter; TP of US$12.4.