UPDATE 1-CITIC, Temasek group to buy Chinese software firm Asiainfo

Mon May 13, 2013 8:32am EDT

HONG KONG May 13 (Reuters) - A consortium comprising China's CITIC Capital and Singapore state investor Temasek Holdings has agreed to buy Asiainfo-Linkage Inc for about $900 million, joining a growing number of buyouts of U.S.-listed Chinese companies.

The CITIC Capital-led group agreed to pay $12 per share for Asiainfo-Linkage, which provides software to telecommunications companies, including China Mobile, China Unicom and China Telecom.

The price is 2.8 percent higher than Asiainfo's closing price of $11.68 on Friday and the same as CITIC Capital's initial bid in January 2012.

Asiainfo's buyout is another example of private equity firms teaming up with founders of U.S.-listed Chinese companies to take them private after a series of accounting scandals dented investors' faith in such companies.

The biggest buyout so far was the $3.7 billion privatisation of Focus Media Holding Ltd by a Carlyle Group-led consortium.

The CITIC-led consortium, which includes company founder Edward Tian, is expected to stump up about $670 million in equity, while the rest of the funding will be through a $330 million debt package, sources told Reuters. The sources declined to be identified as the information was not public yet.

Asiainfo was not subject to any accounting scandals, yet the company's shares lost half their value in two years to 2011, after which CITIC Capital made its original offer last year.

Morgan Stanley acted as lead financial adviser to CITIC Capital, while Nomura International and ICBC International Capital Ltd acted as co-advisers to the private equity firm. China Renaissance Holdings Ltd advised Asiainfo-Linkage's founder Tian.

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