AsiaInfo Gets More Private Equity Interest 多家私募基金有意收购亚信联创

After several months with no news following an unsolicited buyout offer for AsiaInfo-Linkage (Nasdaq: ASIA), the telecoms software maker has burst back into the headlines with reports that it has attracted several more new potential buyers as it seeks to pump up its valuation amid a broader weak market for US-listed China stocks. This new signs of interest, which includes some major global private equity firms, could be a good sign for the broader sector of battered New York-traded Chinese stocks, as it means there is clearly some strong institutional investor interest in better-run companies despite weak broader market sentiment, which means we could see some other interesting buy-out offers in the months ahead.

According to the latest reports, AsiaInfo, one of China’s oldest US-listed firms, has received interest in a buy out of the company from a number of private equity firms, including Silverlake, TPG and Primavera. (English article) That news comes 4 months after a unit of Chinese conglomerate CITIC made an initial unsolicited offer for AsiaInfo, which prompted the company to hire a consultant to seek additional offers. (previous post) This latest report indicates that there is indeed some interest among private equity firms in undervalued US-traded Chinese companies, many of whose shares have been beaten down following a series of accounting scandals that erupted about a year ago. AsiaInfo shares themselves rallied more than 15 percent on Friday after the latest news came out, and are now more than 50 percent higher from where they were trading before the initial reports came out back in February. While this latest news looks promising, I do think that AsiaInfo needs to reach a final deal in the next month or 2 or risk starting to lose some credibility about the true level of interest in a buy-out. These recent news leaks are clearly coming from the company’s investment bankers or other advisers, which means the reports are probably slightly exaggerated and that interest levels may not be as high as the reports indicate. Still, I do sense that opportunistic investors could be out in the market now looking for bargains among these battered China stocks, and that AsiaInfo, as one of the sector’s oldest players, probably does look like a good value at current levels. A final deal will set an important benchmark for other US-listed Chinese tech firms in terms of valuation. AsiaInfo now trades at a relatively modest price-to-earnings ratio of about 11 despite the recent run-up in its stock price, and that could rise a bit higher, perhaps to around 13, by the time a deal is struck. If that happens, look for other well-run companies trading below that level, such as Sohu (Nasdaq: SOHU) or Perfect World (Nasdaq: PWRD) to become potential targets for similar buy outs.


Bottom line: Continued private equity interest in a buyout of AsiaInfo Linkage bodes well for a future new wave of buy-outs of battered US-listed Chinese companies.

Related postings 相关文章:

Investors to AsiaInfo: Let’s See Some Numbers 投资者对亚信创联并购案减失耐心

AsiaInfo Bidding War Erupts, More to Come 亚信联创收购战打响

Shanda Delists: Thanks for the Profits 盛大网络退市:获利可喜

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