* Sina management in talks with CITIC Capital, FountainVest
* TPG, FV had backed Sina's failed bid for Focus Media
* Sina-Focus Media merger talks may be revived (Adds analyst's quotes, details and background)
By George Chen and Melanie Lee
HONG KONG/SHANGHAI, Sept 30 (Reuters) - The management of Sina Corp (SINA.O) led by its chief executive, Charles Chao, is in talks with private equity funds to back a plan for them to buy about $180 million worth of shares in an effort to strengthen control of China's top web portal, sources said on Wednesday.
Two China-focused private equity funds, CITIC Capital and Fountainvest, were in talks with Sina's management team to provide financial support that would enable Sina's management to buy a 10 percent stake in Sina, said the sources familiar with the situation.
However, the sources also noted that the talks may collapse if they could not agree on certain conditions.
"The buy-in helps raise management decision-making power and alleviates Sina's risk as an acquisition target," said Richard Ji, a Morgan Stanley (MS.N) analyst.
On Monday, Sina and Focus Media Holding Ltd. FMCN.O announced that they would scrap their $1.4 billion merger after months of government stonewalling over a deal that would have created China's biggest private sector media company. [ID:nLS260924]
Sina said in a statement released on Monday that it was issuing 5.6 million new shares to an investment firm called New Wave, led by Chao and senior Sina executives, for $180 million.
FountainVest is a $1 billion private equity fund backed by Singapore state investor Temasek Holdings [TEM.UL], while CITIC Capital, backed by China's powerful CITIC Group, is managing several funds worth about $2 billion in total.
Zhang Yicheng, chief executive of CITIC Capital, is already on the board of Sina.
Based on the proposed sale price, Sina's management would buy the shares for about $32.14 per share, or about an 16 percent discount to its last close of $38.25 on Tuesday, according to Sina's Monday statement.
Despite selling at a discount, some analysts expressed doubt over whether Chao and his colleagues in the management group could financially afford to buy the shares on their own.
"It is our belief that this investment is currently unfunded, meaning Sina management will be seeking partners to fund this purchase," said Jason Brueschke, an analyst with Citigroup.
Meanwhile, the sources, who declined to be identified as they were not authorised to speak to the media, said U.S. buyout giant TPG Capital [TPG.UL] and Fountainvest backed Sina's failed bid for core assets of Focus Media founded by Chinese media tycoon Jiang Nanchun in Shanghai.
The Sina-Focus Media merger may be revived but deal price would be a key factor to watch, they said.
A successful merger would have been the largest among publicly traded companies in China's media industry and would have created a diversified giant media company able to compete with the country's two state-run media titans, Beijing-based China Central Television and Shanghai Media Group.
CITIC Capital, FountainVest and Sina all declined to comment. (Editing by Chris Lewis)