Citic Capital Plans $1.8 Bln Take: private of HK-listed AsiaInfo Tech -sources

AsiaInfo Technologies

25/11/2020 06:07

* OCITIC Capital in talks with banks to finance deal
-sources
    * Offer at 30% premium to target's 1-month average price
-sources
    * CITIC to partner with second biggest shareholder China
Mobile-sources
    * CITIC denies the deal, says information is inaccurate

    By Julie Zhu and Kane Wu
    HONG KONG, Nov 25 (Reuters) - Chinese private equity firm
CITIC Capital plans to take private AsiaInfo Technologies Ltd
 1675.HK  in a deal that could value the telecom software
provider at about $1.8 billion, two people with direct knowledge
of the matter told Reuters.
    AsiaInfo's largest shareholder with a 23.4% stake is talking
with banks to finance the deal, said the people - plus two other
people - in what would add to a surge in buyout firms tapping
Hong Kong for take-private opportunities. CITIC denied the deal.
    The people said CITIC aims to pursue the deal in partnership
with China Mobile Communications Group Co Ltd  CHNMC.UL  -
AsiaInfo's second-biggest shareholder with a 19.9% stake and
parent of leading network provider China Mobile Ltd  0941.HK .
    The goal is to eventually list AsiaInfo on the mainland to
take advantage of higher valuations, said one of the people, who
declined to be identified due to confidentiality constraints.
    A prospective offer from the flagship alternative investment
arm of financial conglomerate CITIC Group Corp  CITIC.UL  would
represent a premium of about 30% to AsiaInfo's average share
price over the past month of HK$11.5 ($1.48), the people said.
    CITIC said the information about its plans for taking
AsiaInfo private, the deal's financing and partnering with China
Mobile Communications is inaccurate.
    AsiaInfo and China Mobile did not respond to requests for
comment.
    Beijing-based AsiaInfo was established in 1993 and currently
provides services such as cloud consulting and operation to over
200 telecos, including state-owned majors China Mobile, China
Telecom Corp Ltd  0728.HK  and China Unicom.
    Its stock price has fallen 14% since a mid-September peak
while the benchmark Hang Seng Index  .HSI  has gained 9% in the
same period.
    
    UNDERVALUED
    Hong Kong-listed firms have been involved in $21.5 billion
worth of take-private deals so far in 2020, versus $8.6 billion
for all of last year, Refinitiv data showed. Buyers often cited
undervalued shares as a reason for the deals.
    An abundance of funds at private equity firms and other
long-term investors coupled with few avenues to earn worthwhile
returns have pushed average premiums paid to 43% this year from
34% in 2018, the data showed.
    Last year, CITIC raised $2.8 billion https://www.reuters.com/article/us-citiccapital-fundraising-idUSKCN1UY07K
 in its fourth and biggest China buyout fund. Founded in 2002,
the private equity firm has invested in over 200 portfolio
companies totalling $32 billion worth of assets, with
investments including courier SF Express and the Chinese unit of
McDonald's Corp  MCD.N .

 ($1 = 7.7515 Hong Kong dollars)

 (Reporting by Julie Zhu and Kane Wu; Editing by Anshuman Daga
and Christopher Cushing)
 ((julie.zhu1@thomsonreuters.com; +852 2843 6519;))