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

By newsdoug on March 27, 2012

There are several interesting items out there today on US-listed Chinese firms, led by a resounding investor yawn at news that telecoms software maker and acquisition target AsiaInfo-Linkage (Nasdaq: ASIA) is seeking more offers after a major Chinese investor made a surprise bid for the company last month. In separate but other noteworthy news, we’re getting some more financials that don’t look pretty from car rental specialist China Auto, which has filed to make a New York IPO, and are hearing about an ambitious global expansion plan from e-commerce giant 360Buy, which hopes to someday make a New York IPO to raise more than $1 billion. Let’s start with AsiaInfo-Linkage, which put out a statement on Monday saying it was seeking additional buyers after receiving an offer in February from an investment arm of China’s giant CITIC Group. (company announcement) AsiaInfo’s shares rallied after it announced the initial CITIC bid, and rose again after media reported that private equity firms including KKR and TPG had expressed interest in making competing offers. (previous post) But this latest announcement failed to excite anyone, with AsiaInfo’s shares actually dropping slightly in Monday trade even as the broader Nasdaq rallied nearly 2 percent, indicating investors may be growing impatient with all the talk and want to see some actual numbers. CITIC’s original offer price was never officially disclosed, so it’s not at all clear how much it bid and all we really know is that some media reports have said new bids could value the company at $1 billion or more, which is where the company’s current market capitalization now stands. Look for the stock to come under some pressure if no new concrete details come out soon. Moving on to other matters, media are citing an executive from 360Buy, which also goes by the name Jingdong Mall, saying the company will set up several international sites this year to let overseas buyers purchase items on its site. This latest development, combined with similar recent announcements of major new hiring, reflect the fact that 360Buy has too much cash, after receiving over $1 billion last year in a record-high capital raising round for a privately held Internet company. The company is clearly coming under pressure from its new investors to use some of that cash to create an exciting story for a planned New York IPO, which could come this year or next. But its rapid growth is a bit worrisome, as such quick expansions frequently run into managerial and technical problems and end up creating more losses than new growth. Lastly there’s China Auto, which filed for a New York IPO early this year but has gone silent since then. Now Chinese media are reporting the company has made another IPO filing, in which it disclosed it has lost money over the last 3 years amid a rapid expansion and needs the money from an IPO to repay debt. (Chinese article) This is the first time we’ve gotten such detailed financials, and the money-losing element doesn’t bode well for the offering, following the disastrous launch last week of China’s first New York IPO this year for Vipshop (NYSE: VIPS). (previous post)

Bottom line: Investors are growing impatient with takeover target AsiaInfo-Linkage, and will put the stock under pressure until it reveals more details about potential buyout offers.

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