CITIC Capital target AsiaInfo to consider other bids

Power Joy (Cayman) offered to purchase all AsiaInfo's outstanding shares in January. Power Joy is a wholly owned subsidiary of CITIC Capital China Partners II, a $925 million vehicle that closed in January 2010. AsiaInfo is being advised by Goldman Sachs and Shearman & Sterling, while Morgan Stanley is working with CITIC Capital.

AsiaInfo reported a net income of $72.9 million in 2011, up from $54.8 million the previous year. This came as revenues increased from $343.8 million to $481 million. Nearly all the company's takings come from the sale of business and operation support systems to China's three state-owned telecom providers, with China Mobile alone accounting for more than half of total revenues.

Reuters reported in February that the likes of KKR and TPG Capital were looking at the possibility of a joint bid with CITIC Capital as well as acting independently. Meanwhile, Amdocs, Oracle, IBM and Ericsson were said to be among those interested in AsiaInfo's billing software. It was thought the deal could be worth around $1 billion.

AsiaInfo's market capitalization at the time of CITIC Capital's bid was approximately $714 million, although the NASDAQ-listed firm's value has since risen to nearly $950 million. The stock remains down 36% on a 12-month basis as a result of accounting scandals involving several US-listed Chinese firms.

Short-sellers and hedge funds are scrutinizing companies' financial statements, searching for weaknesses, while private equity firms have been searching for potential take-private opportunities. These are often transacted in collaboration with management with a view to relisting the companies in Asia.

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• Topics
• Buyouts
• Greater China
• North America
• Technology
• buyout
• China
• USA
• CITIC Capital Partners
• TMT