By Sam Boughedda
Investing.com — GDS Holdings Ltd (NASDAQ:GDS) shares gained 3.5% Monday after a Morgan Stanley analyst wrote a note on the stock saying it “will rise in absolute terms over the next 15 days.”
Analyst Yang Liu reiterated an overweight rating and $58 price target on the stock, attributing the forecasted rise to GDS peer VNET receiving “an unsolicited preliminary nonbinding buyout proposal.”
It was reported earlier today that VNET Group Inc (NASDAQ:VNET) has received a proposal from investment-firm Hina Group and Industrial Bank Co. Ltd., Shanghai Branch, for all of its outstanding ordinary shares for $8 per American depositary share, or approximately $1.33 per ordinary share.
VNET shares jumped 28% Monday.
“The offer price implies a 54% premium to VNET’s last closing price. We think this event could trigger a valuation repair for China IDC (internet data center) ADRs including GDS, which is trading far below its current asset value,” explained Liu.
“We estimate that there is about an 80%+ (or “highly likely”) probability for the scenario,” the analyst said.
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