- Chindata has received a preliminary non-binding takeover proposal from China Merchants Capital
- The offer price of US$9.2 per ADS is 15% higher than Bain Capital’s previous offer, valuing the company at FY23 EV/adj EBITDA of c.7x
- Latest offer is still not attractive, compared to peer’s trading multiples (5-11x) and previous VNET offer (8x)
Offer price is 15% higher than Bain Capital’s previous offer. China Merchants Capital, an alternative asset management arm of state-owned conglomerate China Merchants Group, made a non-binding takeover bid of US$9.2 per ADS for Chindata (CD US) yesterday, according to a statement published by China Merchants Capital. The offer price is 27% higher than the closing price of US$7.24 on 6 June 2023, and 15% higher than Bain Capital’s previous offer made in June. The company’s share price climbed c.12% during the US market session after the announcement.
Latest offer is still not attractive, referencing to peer’s trading multiples and previous VNET offer. The offer price implies c.7x FY23 EV/adj EBITDA, which is 1-pt higher than CD’s current trading multiple and Bain Capital’s previous offer of c.6x. While the offer price is 15% higher than Bain Capital’s previous offer, we think that the latest offer price is still not attractive compared to peers which are trading at 5-11x and VNET founder’s privatisation offer for VNET which valued the company at 8x FY23 EV/adj EBITDA (which did not result in a successful privatisation). China Merchants Capital has previously shown interest in taking over CD, according to a Bloomberg news report in Nov 2022. We expect Bain Capital will propose a better offer (compared to its previous offer of US$8 per ADS) upon receiving this rival bid.