GDS Weighing $400 Million Stake in Global Data Centers

(Bloomberg) -- Data center operator GDS Holdings Ltd. is considering selling a minority stake in its international business for about $300 million to $400 million to a strategic partner, according to people familiar with the matter.

The Shanghai-based digital infrastructure company is working with an adviser and is weighing selling about a 30% to 40% stake in the assets, the people said, asking not to be identified as the information is private. Investment firms and sovereign wealth funds have expressed interest in the international portfolio, the people said.

GDS develops and operates data centers in China including in Beijing, Hong Kong, Shanghai and Chengdu, according to its website. It is expanding into Southeast Asia, providing services at a third-party data center in Singapore and building facilities in Malaysia and Indonesia.

Deliberations are ongoing, details could change and GDS could decide not to proceed with a stake sale, the people said. 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, people familiar with the matter have said. 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.