By Kane Wu and Julie Zhu

HONG KONG, Jan 15 (Reuters) - U.S.-based infrastructure investment firm I Squared Capital is weighing an offer for Hong Kong-listed broadband operator HKBN that could value it at up to $1 billion, two people with knowledge of the deal said.

I Squared Capital's offer is set to trump an earlier bid by China Mobile that offered HK$5.23 per share, said the sources, adding, however, that the firm is not keen to pay more than HK$6 apiece.

The potential higher offer adds competitive tension to the prolonged buyout process of HKBN, as rival China Mobile, the world's largest wireless carrier by subscribers, seeks to extend footprint outside mainland China.

I Squared is looking to present its offer by the end of this month, but the timing is still fluid, said one of the sources and two other people with knowledge of the situation, who all declined to be named as the information was confidential.

I Squared is considering including a non-cash component in its offer structure, said one of the four sources.

Miami, Florida-headquartered I Squared Capital declined to comment. HKBN did not immediately respond to Reuters request for comment.

State-owned China Mobile made its offer in early December that would value HKBN at HK$6.86 billion ($882 million), after showing interest nearly two years ago.

With more than $40 billion in assets under management, I Squared also discussed a potential buyout with HKBN in 2023 which did not yield any result.

HKBN shares closed at HK$5.25 on Tuesday, giving it a market cap of $883 million. The company has lost 65% of its market value since April 2020 when its share price was at the highest over the last five years.

Founded in 1999, HKBN provides internet, data centre and WiFi services, among others.

In 2018, it announced a $1.34 billion acquisition of fixed-line operator WTT.

WTT's private equity shareholders MBK Partners and TPG became HKBN's shareholders after the transaction.

These two investors are seeking to exit the company in the potential buyout, said separate people with knowledge of the situation.

MBK and TPG declined to comment.

(Reporting by Kane Wu and Julie Zhu. Editing by Jane Merriman)

((kane.wu@thomsonreuters.com; +85228436590; Reuters Messaging: kane.wu.thomsonreuters.com@reuters.net))