(Bloomberg) -- Talks to combine GDS Holdings Ltd.’s business with GLP Pte’s data centers in China have stalled over valuation, according to people familiar with the matter.
An almost 60% stock slump in the past 12 months has made it difficult for Shanghai-based GDS to finance a cash-and-shares deal, the people said, asking not to be identified because the information is private. Talks could still resume later, the people said.
Representatives for GDS and GLP didn’t immediately respond to calls and emails seeking comment.
GDS, a U.S.- and Hong Kong-listed developer and operator of data centers across China, had held preliminary talks with GLP over a potential transaction in which the Singapore-based investment manager would have become a shareholder in GDS, Bloomberg News reported in May. The assets could have been valued at $8 billion to $10 billion, people familiar with the matter said at the time.
Digital infrastructure assets such as data centers have become hot assets during the pandemic as platforms supporting everything from video streaming to online gaming gained popularity. That’s led to increasing interest from financial investors and industry players seeking to gain scale by consolidation.
GDS, which raised $1.7 billion in a Hong Kong secondary listing in 2020, said at the time that it planned to use the proceeds to invest in data centers in the Asian financial hub, China and Southeast Asia, including via mergers and acquisitions. The company has acquired some hubs across China as well as land in Indonesia to build two new facilities to help bolster its market share even as higher power costs weighed on earnings, it said in November.
Founded in 2009, GLP is a global investment manager in logistics, digital infrastructure and related technologies, according to its website. It is present in 17 countries and counts about $120 billion in assets under management.