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PAG and CDH looking to join list of bidders for Vnet

Buyout firms CDH Investments and PAG are considering bids for US-listed Chinese data center company Vnet Group Inc., according to people familiar with the matter.

CDH and PAG have separately been exploring financing and deal structures for a potential offer, the people said, asking not to be identified because the matter is private. The investors could either bid on their own or form a consortium with other prospective bidders, the people said.

Considerations are ongoing and the companies could still decide against pursuing a transaction, they said. A representative for PAG declined to comment, while representatives for CDH and Vnet didn’t immediately respond to requests for comment.

Vnet last month received a preliminary non-binding takeover proposal from its founder and executive chairman Josh Sheng Chen at $8.20 per American depositary receipt in cash. Its board formed a special committee to evaluate the proposed transaction as well as other strategic alternatives, and is working with financial and legal advisers.

The approach followed a previous non-binding cash takeover in April from boutique Chinese advisory and private equity firm Hina Group and the Shanghai branch of Industrial Bank Co. to acquire Vnet’s shares for $8 per ADR.

Other companies considering bidding for Vnet include North Asia-focused investor MBK Partners, Bloomberg News has reported.

Shares in Vnet closed 0.7% higher on Tuesday after jumping as much as 18% in pre-market trading. They have declined 40% this year, valuing the company at about $802 million.

Founded in 1996, Vnet is a carrier-neutral data center services provider in China. It counts more than 50 data centers in more than 30 cities across China. The company formerly known as 21Vianet Group changed its name to Vnet Group last year.

CDH, an alternative investment fund manager focused on China, started in 2002 as a private equity platform and later expanded into other areas such as venture and growth capital, real assets, private credit, equities and private wealth management, according to its website. It had more than $26.6 billion of assets under management as of September last year.

PAG, an Asia-focused private equity firm backed by industry giant Blackstone Inc., counts about $50 billion in assets as of the end of June. It runs a variety of strategies including private equity, private debt, distressed, real estate and absolute return funds. The firm is considering delaying its planned initial public offering in Hong Kong amid market volatility, Bloomberg News has reported. Bloomberg

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