ST Telemedia is considering selling its holding in Chinese data centre operator GDS Holdings, people familiar with the situation said.
The company, backed by Temasek Holdings, holds almost 34% of GDS’s Class A shares, representing about 20% of aggregate voting power, the latest GDS annual report shows.
ST Telemedia is sounding out interest from potential buyers for the entire stake, the people said, asking not to be identified as the deliberations are private.
Data centres are in strong demand globally, thanks in large part to the artificial intelligence boom. That’s reflected in the share price of GDS, which is up almost 60% in Hong Kong this year and more than 220% over the past 12 months. The company has a market value of around US$7.4 billion ($9.48 billion).
The rally in GDS, which also has American depositary receipts, could make it harder for ST Telemedia to find a buyer for its stake, the people said, adding that it may offload the holding in blocks. The company may also decide not to sell, they said, noting that deliberations are at an early stage.
ST Telemedia declined to comment. GDS didn’t respond to requests for comment.
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Singapore-headquartered ST Telemedia invests in communications, media, data centres and infrastructure technology businesses. ST Telemedia also owns one of Asia’s largest data centre operators, ST Telemedia Global Data Centres.
Bloomberg News reported in July that KKR & Co. is in talks about potentially buying ST GDC in a deal that could value the firm at more than US$5 billion.
Meanwhile, GDS has a presence beyond mainland China with a stake in DayOne Data Centres Singapore, which runs facilities in Hong Kong, Tokyo and Southeast Asia. DayOne is considering an initial public offering in the US, Bloomberg reported in February.
GDS posted revenue of US$375 million for the quarter through March, with net income of US$105 million, reversing a US$48 million loss a year earlier.
