AsiaInfo Falls Amid Concern Buyout Proposal May Not Be Completed
AsiaInfo-Linkage Inc. (ASIA), which sells telecommunications software to China’s biggest wireless carriers, fell to an eight-week low in New York amid concern that a proposal to take the company private may not be executed.
The Beijing-based company tumbled 4.8 percent to $9.91 at 1:47 p.m. in New York, the lowest since June 5. The stock has advanced 28 percent this year after falling 53 percent in 2011.
AsiaInfo, in a statement, said that while the company continues to consider buyout proposals “there can be no assurance that any definitive offer will ultimately be made, that any agreement will be executed, or that any transaction will be approved or consummated.” AsiaInfo received a buyout offer in January from a subsidiary of Citic Capital China Partners II, a private-equity fund owned by China Citic Bank Corp. (998), a unit of the country’s biggest state-owned investment company.
“It’s been a while since they announced that offer, so there’s uncertainty in the buyout story that’s created weakness on the stock,” Kun Tao, an analyst at Roth Capital Partners, said in an interview from Newport Beach, California. “If the buyout cannot go through, the shares would plunge.”
Tao has a buy rating on AsiaInfo, and estimates a buyout price of $14 to $15 per share. He said the process may take “another two to three months.”
AsiaInfo hired Goldman Sachs (Asia) LLC in February to consider the Citic Capital proposal and other potential offers.
Jimmy Xia, AsiaInfo’s investor relations director, didn’t immediately return a phone call and e-mailed request made after hours for comment. Phone messages left at the company’s office in Santa Clara, California, were also not immediately returned.
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