IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata Group (CD US)</a> has entered a definite agreement with Bain Capital at US$8.60 per ADS, 7.5% higher than its previous offer of US$8.00 per ADS.</li>
<li>Completion is conditional on shareholder approval, dissenting shareholders representing less than 12% of outstanding shares and any applicable regulatory approvals. The completion conditions should be met.</li>
<li>CMC’s offer, while higher, does not meet the "<em>superior proposal</em>" criterion. At the last close price and December-end completion, the gross and annualised spread is 6.0% and 16.6%, respectively.</li>
</ul>



Chindata Group (CD US) has entered a definite agreement with Bain Capital at US$8.60 per ADS, 7.5% higher than its previous offer of US$8.00 per ADS.
Completion is conditional on shareholder approval, dissenting shareholders representing less than 12% of outstanding shares and any applicable regulatory approvals. The completion conditions should be met.
CMC’s offer, while higher, does not meet the "superior proposal" criterion. At the last close price and December-end completion, the gross and annualised spread is 6.0% and 16.6%, respectively.


Chindata (CD US): Bain’s Binding Proposal at US$8.60 Per ADS

<ul>
<li>China Merchants Capital (CMC) <a href="https://en.cmcapital.com.cn/list/669" target="_blank" rel="noopener">disclosed</a> a competing preliminary non-binding proposal to acquire <a href="https://www.smartkarma.com/entities/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata Group (CD US)</a> at US$9.20 per ADS, a 15.0% premium to Bain Capital’s US$8.00 per ADS offer.</li>
<li>Astonishingly, Chindata did not publicly disclose the CMC offer, which was sent to the special committee on 9 June, i.e., 34 days ago.</li>
<li>CMC must get Bain Capital’s support due to its 92.34% voting rights. The presence of a credible competing proposal will require Bain Capital to match CMC’s offer.</li>
</ul>


China Merchants Capital (CMC) disclosed a competing preliminary non-binding proposal to acquire Chindata Group (CD US) at US$9.20 per ADS, a 15.0% premium to Bain Capital’s US$8.00 per ADS offer.
Astonishingly, Chindata did not publicly disclose the CMC offer, which was sent to the special committee on 9 June, i.e., 34 days ago.
CMC must get Bain Capital’s support due to its 92.34% voting rights. The presence of a credible competing proposal will require Bain Capital to match CMC’s offer.


Chindata (CD US): China Merchants Capital’s Rival Privatisation Offer

Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

NTT (Nippon Telegraph & Telephone) / Equity Bottom-Up

<ul>
<li>NTT's global data center business has 6% market share with annual revenue growth of 20% that is twice the industry average</li>
<li>We have updated our model and valuation summary to reflect the transfer of NTT Ltd, which operates the GDC business, into NTT Data</li>
<li>Our valuation remains unchanged although we have lowered our target price ¥4,500 to ¥4,450 for payment of the H1 dividend.  NTT remains a top pick in our coverage</li>
</ul>


NTT's global data center business has 6% market share with annual revenue growth of 20% that is twice the industry average
We have updated our model and valuation summary to reflect the transfer of NTT Ltd, which operates the GDC business, into NTT Data
Our valuation remains unchanged although we have lowered our target price ¥4,500 to ¥4,450 for payment of the H1 dividend.  NTT remains a top pick in our coverage


NTT (Buy) - Investor Day Highlights Global Data Center Business

<ul>
<li>
<a href="https://www.smartkarma.com/entities/21-vianet-group-inc-adr" target="_blank" data-smartkarma-citation="entities:8489:1" rel="noopener">21Vianet Group (VNET US)</a> disclosed a privatisation proposal from the founder at US$8.20 per ADS, a 2.5% premium to The Hina Group/Industrial Bank’s offer of US$8.00 (disclosed on 11 April).</li>
<li>The data centre industry continues to be a hotbed for M&amp;A. <a href="https://www.bloomberg.com/news/articles/2022-07-27/mbk-partners-is-said-to-weigh-rival-bid-for-chinese-data-center-firm-vnet" target="_blank" rel="noopener">Bloomberg reported</a> on 27 July that MBK Partners is mulling an offer for VNET. </li>
<li>The offer is unattractive, and Mr Cheng, with 28.79% of voting rights, will need the support of other substantial shareholders. This latest offer underlines the current mispricing of the shares</li>
</ul>



21Vianet Group (VNET US) disclosed a privatisation proposal from the founder at US$8.20 per ADS, a 2.5% premium to The Hina Group/Industrial Bank’s offer of US$8.00 (disclosed on 11 April).
The data centre industry continues to be a hotbed for M&amp;A. Bloomberg reported on 27 July that MBK Partners is mulling an offer for VNET. 
The offer is unattractive, and Mr Cheng, with 28.79% of voting rights, will need the support of other substantial shareholders. This latest offer underlines the current mispricing of the shares


VNET’s Opportunistic US$8.20 Bid from the Founder

<ul>
<li>
<a href="https://www.bloomberg.com/news/articles/2022-07-27/mbk-partners-is-said-to-weigh-rival-bid-for-chinese-data-center-firm-vnet" target="_blank" rel="noopener">Bloomberg reported</a> that MBK Partners is in talks to team up with a partner on a joint offer for <a href="https://www.smartkarma.com/entities/21-vianet-group-inc-adr" target="_blank" data-smartkarma-citation="entities:8489:1" rel="noopener">21Vianet Group (VNET US)</a>. Considerations are at a preliminary stage.</li>
<li>A potential bid would compete against The Hina Group and Industrial Bank’s $8.00 per ADS offer. The Board has not provided an update on its stance on this offer.   </li>
<li>Takeover interest is unsurprisingly due to VNET’s depressed share price, unchanged FY22 guidance and ongoing data centre M&amp;A activity.     </li>
</ul>



Bloomberg reported that MBK Partners is in talks to team up with a partner on a joint offer for 21Vianet Group (VNET US). Considerations are at a preliminary stage.
A potential bid would compete against The Hina Group and Industrial Bank’s $8.00 per ADS offer. The Board has not provided an update on its stance on this offer.   
Takeover interest is unsurprisingly due to VNET’s depressed share price, unchanged FY22 guidance and ongoing data centre M&amp;A activity.     


United States

Iron Mountain Incorporated is a storage and information management company. The Company provides records management, data management solutions, and information destruction services.

Crown Castle International Corp. operates as a real estate investment trust. The Company owns, operates, and leases towers and other infrastructure for wireless communications. Crown Castle manages and offers wireless communication coverage and infrastructure sites in the United States and Australia.

UDR, Inc. is a self-administered real estate investment trust.  The Company owns, operates, and develops apartment communities located nationwide.

American Homes 4 Rent operates as an internally managed Maryland real estate investment trust focuses on acquiring, renovating, leasing, and operating single-family homes as rental properties.

CubeSmart is a self-administered and self-managed real estate company that owns, operates, acquires, and develops self-storage facilities in the United States.

Gaming & Leisure Properties, Inc. operates as a self-administered, self-managed real estate investment trust. It engages in the property business, which consists of acquiring, financing, and owning real estate property to be leased to gaming operators in triple net lease arrangements. The company operates through two business segments: GLP Capital and the TRS Properties. The GLP Capital reportable segment consists of the leased real property and represents the majority of business. The TRS Properties reportable segment consists of Hollywood Casino Perryville and Hollywood Casino Baton Rouge. The company was founded on February 13, 2013 and is headquartered in Wyomissing, PA

Equity Residential is a real estate investment trust. The trust acquires, develops, and manages apartment complexes in the United States.

Weyerhaeuser Company is an integrated forest products company with offices or operations worldwide.  The Company primarily grows and harvests trees, develops and construct real estate and makes a range of forest products.  Weyerhaeuser is also classified as a REIT.

Healthpeak Properties, Inc. operates as a real estate investment trust. The Trust invests in health care related real estate properties such as senior housing, life sciences, medical offices, hospitals, and skilled nursing homes. Healthpeak Properties serves customers in the United States.

Simon Property Group, Inc. is a self-administered and self-managed, real estate investment trust. The Company owns, develops, and manages retail real estate properties including regional malls, outlet centers, community/lifestyle centers, and international properties.

Link REIT is a real estate investment trust in Hong Kong. The Trust owns and operates shopping centers, parking space facilities and real estate retail space.

Goodman Group is an integrated industrial property group. The Group has operations in Australia, New Zealand, UK, Asia and Europe. Goodman's activities include property investment, funds management, property development and property services. The Group's property portfolio includes business parks, industrial estates, office parks and warehouse/distribution centers.

Scentre Group develops and owns retail real estate properties. The Company is responsible for the development, design, management, leasing, and marketing of its portfolio of Westfield branded shopping centers. Scentre Group owns properties throughout Australia and New Zealand.

SEGRO plc is a property investment and development company. The Company provides flexible business space across Europe with offices, light industrial, logistics, warehouses and data center properties.

CapitaLand Ascendas REIT is an industrial real estate investment trust. The Trust invests in business and science park properties, integrated development, amenities, and retail (IDAR) properties, high-specifications industrial properties and data centers, light industrial and flatted factories, and logistics and distribution centers.

GPT Group is an active owner and manager of a diversified portfolio of Australian retail, office and industrial property assets. The Group's property portfolio include the MLC Centre, Australia Square, Rouse Hill Town Centre and Melbourne Central.

Kenedix Retail REIT Corporation is a real estate investment trust (REIT) which mainly invests in real estate and securitized real estate products. The Company invests mainly in commercial properties which are shopping centers, and super markets in Tokyo metropolitan, Osaka, Nagoya and Fukuoka area.

Vicinity Centres retails asset and property management services. The Company offers a retail property investment and services organization involved in the ownership, management, and development of retail properties. The Company operates shopping centers across Australia.

Stockland is a diversified Australian property group. The Group develops and manages Retail centers, Residential Communities and Retirement Living assets with a focus on regional centers and outer metropolitan. Stockland also owns a portfolio of Office and Industrial assets.

Nippon Building Fund Inc. is a real estate investment trust (REIT) which mainly invests in real estate and securitized real estate products. Properties are mainly Business offices and are located in Tokyo Major 5 wards and Kanto area.

Digital Realty Trust, Inc. owns, acquires, repositions, and manages technology-related real estate.  The Company's properties contain applications and operations critical to the day-to-day operations of technology industry tenants and corporate enterprise data center tenants.  Digital's property portfolio is located throughout the United States and in England.

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Digital Realty Trust (DLR US)

Chindata (CD US): Bain’s Binding Proposal at US$8.60 Per ADS

Bain's revised offer is still unattractive, but the completion conditions should be met. At the last close price and December-end completion, the...

Arun George

Chindata (CD US): China Merchants Capital’s Rival Privatisation Offer

CMC must get Bain Capital’s support due to its 92.34% voting rights. The presence of a credible competing proposal will require Bain Capital to...

Arun George

NTT (Buy) - Investor Day Highlights Global Data Center Business

NTT’s data center business is growing 20%+/year before currency tailwinds as the NTT Data integration kicks off. We have updated our model and SOTP...

Kirk Boodry

VNET’s Opportunistic US$8.20 Bid from the Founder

The offer is unattractive. Nevertheless, with the data centre M&A activity levels remaining elevated, the current mispricing of the shares will...

Arun George

VNET Draws the Interest of MBK Partners

Takeover interest is unsurprisingly due to VNET’s depressed share price, unchanged FY22 guidance and ongoing data centre M&A activity. Buy some...

Arun George

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