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Buyout giants join the battle for data centre firm Global Switch

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Buyout firms Blackstone and KKR are among suitors weighing bids for data centre company Global Switch, as the battle for digital infrastructure assets heats up, according to people familiar with the matter.

Data centre investor DigitalBridge Group and operators Digital Realty Trust and Equinix have also expressed preliminary interest in London-based Global Switch, sources said, asking not to be identified discussing confidential information.

Global Switch, controlled by Chinese steelmaker Jiangsu Shagang Group and backed by Avic Trust, has been exploring a sale that could value it at £8bn  (€9.5bn) or more, Bloomberg News reported earlier this year.

The business could draw offers from other infrastructure-focused investors and pension funds. Deliberations are ongoing and there's no certainty any of the suitors will decide to pursue offers, or that Global Switch's owners will decide to sell.

Representatives for Blackstone, DigitalBridge, Digital Realty, Global Switch and KKR declined to comment. A spokesperson for Equinix didn't immediately respond to requests for comment, while a representative for Jiangsu Shagang couldn't immediately respond.

The potential sale of Global Switch follows an aborted Hong Kong initial public offering in 2019. In August of that year, Shagang bought another 24pc stake in a £1.8bn-pound deal from British billionaire brothers David and Simon Reuben, who had begun to whittle down their ownership in 2016.

Shagang then became the largest shareholder.

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Global Switch owns and operates 13 data centres in Europe and Asia Pacific spanning about 428,000 sqm, according to its website. Its clients include government organisations, mobile carriers and financial institutions.

Data centre companies have been attracting strong takeover interest, in part due to perception of stable returns and expectations of ongoing growth as people increasingly rely on technology.

Earlier this month, KKR and Global Infrastructure Partners agreed to acquire data-centre owner CyrusOne in a transaction valued at roughly $11.5bn (€10.25bn). Around the same time, American Tower agreed to buy CoreSite, valuing the data-centre real estate investment trust at about $10.1bn including debt.

Global Switch's 2027 euro-denominated bonds fell 3.6 cents on Wednesday to about 104.7 cents each. The 2030 euro note fell 0.8 cents, to trade close to its face value.

Meanwhile, KKR is considering boosting its offer for Telecom Italia after top investor Vivendi SE said the €10.8bn bid was too low, according to sources.

The US buyout firm is in the early stages of discussing with advisers how much it would need to increase its proposal to win over reticent shareholders.

Telecom Italia said on Sunday it had received a preliminary bid of 50.5 cents per share from KKR. Vivendi, controlled by French billionaire Vincent Bollore, owns about 24pc of Telecom Italia.

Easy credit and the pressure to spend ballooning amounts of capital has driven dealmaking by buyout firms to a record high this year. Including debt, a potential acquisition of Telecom Italia would rank as one of the biggest-ever private equity takeovers.


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