Acquisition of AsiaInfo-Linkage, Inc. by a Private Investor Consortium May Not Be in the Best Interests of AsiaInfo-Linkage Shareholders
Robbins Arroyo LLP is investigating the acquisition of AsiaInfo-Linkage, Inc. (NASDAQ: ASIA) by a private investor consortium led by CITIC Capital Partners, the private equity arm of CITIC Capital Holdings Ltd. The private investor consortium includes Edward Tian, co-founder, board member, and significant shareholder of approximately 9.3% of AsiaInfo-Linkage.
The Board of Directors’ Actions May Prevent AsiaInfo-Linkage Shareholders from Receiving Maximum Value for Their Stock
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at AsiaInfo-Linkage is undertaking a fair process to obtain maximum value and adequately compensate its shareholders in the merger.
On May 13, 2013, the companies announced the signing of a definitive merger agreement under which CITIC Capital Partners will acquire AsiaInfo-Linkage for $12.00 per share of common stock in cash. The $12.00 merger consideration represents a premium of only 2.7% based on AsiaInfo-Linkage’s closing price on May 10, 2013, the last trading day prior to the merger announcement. The 2.7% premium is substantially below the median premium of 31.86% for comparable transactions over the past three years. Further, the $12.00 offer price is considerably lower than the target price of $16.00 set by an analyst at China International Capital Corporation on August 2, 2012, and $12.10 set by an analyst at Deutsche Bank on February 6, 2013.
Is the Acquisition Best for AsiaInfo-Linkage and Its Shareholders?
On April 27, 2013, AsiaInfo-Linkage released its fiscal year 2013 first quarter financial results reflecting an increase in total revenues, net revenue, and income from operations. Specifically, total revenues increased 15.6% year-over-year to $143.0 million, net revenue increased 12% year-over-year to $135.7 million, and income from operations increased 17.2% year-over-year to reach $2.9 million. Further, AsiaInfo-Linkage exceeded analyst EPS expectations in the last two consecutive quarters, as well as exceeded analyst net income and sales expectations in the past three consecutive quarters.
In announcing the results, AsiaInfo-Linkage President and Chief Executive Officer Steve Zhang was quoted as saying, “The focus of our newest projects for China’s three telecommunications carriers continues to be monetization of their robust growth in data traffic, which continues to outpace their data traffic revenue growth. For China Mobile alone, we have signed agreements with nine provincial networks to implement our analytical solutions to study user characteristics in order to optimize the carrier’s data traffic management and pricing strategies.”
Given these facts, the firm is examining the board of directors’ decision to sell AsiaInfo-Linkage now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
AsiaInfo-Linkage shareholders have the option to file a class action lawsuit against the company to secure the best possible price for shareholders and the disclosure of material information so shareholders can vote on the transaction in an informed manner.
AsiaInfo-Linkage shareholders who would like more information about their rights and potential remedies can complete the form below and we will contact you directly. You can also contact attorney Darnell R. Donahue at (800) 350-6003.