AsiaInfo-Linkage finally accepts CITIC-backed MBO offer
Chinese telecom software provider AsiaInfo-Linkage has accepted a take-private offer from CITIC Capital Partners that values the company at approximately $890 million. The initial offer was made last January but has taken the AsiaInfo board about 16 months to approve the deal amid reports of interest from other prospective private equity buyers.
According to a regulatory filing, a consortium led by CITIC and AsiaInfo co-founder Edward Tian will pay $12 in cash for all outstanding shares in the company, which represents a premium of 52% to the January 11, 2012 closing price. The investor group also includes CITIC Private Equity, China Broadband Capital, InnoValue Capital and Temasek Holdings subsidiary Ellington Investments.
The transaction will be supported by a $330 million debt facility provided by Bank of Taiwan, Cathay United Bank, ICBC International Capital, Maybank Investment and Nomura International.
AsiaInfo will be de-listed if the deal is approved by a majority of the outstanding shares. As AsiaInfo is a Delaware-incorporated company it is possible the process might be delayed by class action lawsuits - a fairly standard occurrence when the target company is incorporated in the US rather than in the Cayman Islands.
Last November, CITIC was reported to be nearing a deal for the company, with Primavera Capital and Silver Lake, said to be among the firms to express an interest in the asset, having dropped out of the bidding. The previous February, the likes of KKR and TPG Capital were reportedly looking at the possibility of a joint bid with CITIC as well as acting independently.
AsiaInfo reported a net income of $29.9 million in 2012, down from $72.9 million the previous year as cost of revenues and operating expenses increased significantly. Revenue came to $547.8 million compared to $480.9 million in 2011. Nearly all the company's takings come from the sale of business and operation support systems to China's three state-owned telecom providers.
This is the seventh PE-backed take-private of a US-listed Chinese company to receive board approval so far this year. CITIC Capital is also involved in the $3.7 billion buyout of Focus Media, which was voted through by shareholders last month.
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