Blackstone, Pactera insiders make $680 million offer


Pactera Technology International Ltd said on Monday that Blackstone Group LP , together with the company's management, made a $680.3 million non-binding proposal to take China's largest technology outsourcing firm private.

Pactera said it expected its board of directors to form a special committee of independent directors to consider the consortium's offer of $7.50 per share. Pactera shares surged 31.1 percent to $6.90.

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Suspicion over accounting standards has been a major drag on U.S.-listed Chinese companies, giving management at some companies an opportunity to team up with private equity firms and make offers that capitalize on big discounts to peers on the Hong Kong and Chinese stock markets.

Prior to Monday's announced proposal, Pactera shares were down 33.8 percent this year. By comparison, the NASDAQ , where it is listed, is up 15.9 percent.

Pactera was trading at 3.3 times its projected 12-month earnings before interest, taxes, depreciation and amortization, compared with an average 9.1 times for its peers, according to Thomson Reuters data.

In a letter on Monday, Blackstone said it had teamed up with Pactera's non-executive chairman and VanceInfo co-founder Chris Chen, Pactera Chief Executive Tiak Koon Loh, and three of the company's executive committee members.

Their offer was only a preliminary indication of interest and represented a 39 percent premium over Pactera's volume-weighted average closing share price during the last 30 trading days, according to Blackstone.

The offer came one month after Blackstone abandoned an effort to outbid another buyout firm that teamed up with a CEO to take a technology company private - the $24.4 billion offer from Michael Dell and Silver Lake for computer maker Dell Inc .

Beijing-based Pactera, formed last year through a merger of HiSoft Technology International Ltd and VanceInfo Technologies Inc, offers technology outsourcing and consulting services to blue-chip companies across the world.

(Reporting by Greg Roumeliotis in New York; Editing by Jeffrey Benkoe)