SCHEDULE: Temasek Affiliates Reduce GDS Holdings Stake to 28.7%

Singapore Technologies Telemedia and its affiliates, including Temasek, have reduced their beneficial ownership in GDS Holdings Limited to 28.7% following a sale of 48 million Class A ADSs.

Summary

• Reporting persons (Singapore Technologies Telemedia Pte Ltd, STT Communications Ltd, STT Garnet Pte. Ltd., and Temasek Holdings (Private) Limited) beneficially own 445,288,484 Class A Shares of GDS Holdings Limited as of September 10, 2025.
• This ownership includes 16,000,000 Class A Shares issuable upon conversion of 0.25% Convertible Senior Notes due 2029.
• The beneficial ownership represents approximately 28.7% of the outstanding Class A Shares.
• On September 10, 2025, STT Garnet sold 48,000,000 Class A Shares (in the form of ADSs) at a price of $32.20 per ADS.
• Following the sale, STT Garnet continues to beneficially retain and own Class A Shares representing not less than 25% of GDS Holdings' issued and outstanding share capital.
• The reporting persons' aggregate voting power is approximately 18.4% for matters with Class A and Class B shares voting on a 1:20 basis (e.g., election of a simple majority of directors, changes to articles adversely affecting Class B rights) and approximately 27.9% for other matters with a 1:1 voting basis.
• A 180-day lock-up period is in effect for STT Garnet, restricting further disposal of Class A Shares or related securities, with exceptions for off-market transactions or sales to strategic investors.

Sentiment

Score: 4

Explanation: The sentiment is moderately negative due to a significant share sale by a major institutional investor, which could signal a re-evaluation of the investment. However, the investor retains a substantial stake and governance rights, and a lock-up period is in place, mitigating immediate further selling pressure.

Positives

• STT Garnet retains a significant stake of at least 25% in GDS Holdings, indicating continued strategic interest.
• There is no change in STT's existing governance rights under the Issuer's articles of association, maintaining their influence.
• The sale was executed at a specific price of $32.20 per ADS, providing a clear valuation point for the transaction.

Negatives

• A significant block of 48,000,000 Class A ADSs was sold by a major institutional investor, representing a reduction in their overall stake.
• The sale could be perceived as a portfolio rebalancing or a move to realize gains, potentially putting downward pressure on the stock price in the short term.

Risks

• Potential for future sales by the reporting persons after the 180-day lock-up period (around March 2026), which could further dilute their stake or impact the market price.
• The dual-class share structure, where Class B shares have significantly more voting power (1:20 ratio) on certain matters, could limit the influence of Class A shareholders on key corporate decisions.

Future Outlook

STT Garnet has committed to a 180-day lock-up period, restricting further sales of GDS Holdings Class A Shares or related securities, with exceptions for off-market transactions or sales to strategic investors. This indicates a temporary pause in significant divestment activities by this reporting group.

Industry Context

GDS Holdings is a major data center operator. A significant shareholder reducing its stake could reflect a portfolio rebalancing by a large institutional investor like Temasek, potentially driven by broader market conditions, sector-specific valuations, or internal investment mandates. It might also signal a shift in the perceived growth trajectory or risk profile of the data center industry in the region.

Comparison to Industry Standards

• The sale by a major institutional investor like Temasek is a common practice for portfolio rebalancing, similar to actions seen from other large sovereign wealth funds or private equity firms in the technology and infrastructure sectors.
• Maintaining a significant stake (over 25%) while divesting a portion is consistent with a long-term strategic investor who may be monetizing some gains while retaining influence and exposure to future growth. For example, other data center companies like Equinix or Digital Realty Trust often see large institutional holders adjust their positions without fully exiting, reflecting ongoing strategic interest.
• The dual-class share structure of GDS Holdings, which grants disproportionate voting rights to Class B shares, is a common governance model among technology companies, particularly those with founder control, but it can be a point of concern for some institutional investors focused on one-share-one-vote principles.

Stakeholder Impact

• Shareholders: The sale could lead to increased supply of shares in the market, potentially impacting share price. Existing shareholders might view the divestment by a major investor as a negative signal.
• Company (GDS Holdings): The reduction in a major shareholder's stake might affect investor confidence, but the retention of significant ownership and governance rights suggests continued strategic alignment.

Next Steps

• Monitoring the expiration of the 180-day lock-up period (around March 2026) for potential further share disposals by STT Garnet.
• Observing any future changes in beneficial ownership by the reporting persons.

Key Dates

Recommendation

While a significant shareholder has reduced its stake, the remaining ownership is still substantial, and governance rights are unchanged. The 180-day lock-up provides a temporary floor against further immediate selling pressure from this party. Investors should hold to observe the company's performance and any further strategic moves by this key investor after the lock-up period, as well as broader market conditions for data centers. The sale could be a portfolio rebalancing rather than a fundamental negative signal about GDS Holdings itself.

Keywords

GDS Holdings, GDS, Schedule 13D/A, Beneficial Ownership, Share Sale, STT, Temasek, Data Center, Convertible Notes, Class A Shares, ADS, Institutional Investor