Rival bidder for China's iKang Healthcare hikes offer

Meinian, which received numerous PE investments before listing last August in Shenzhen through a reverse merger, said in a regulatory filing that the consortium is willing to pay $25.00 per share for all outstanding American Depository Shares in iKang. The offer values the company at more than $1.6 billion.

Sequoia Capital, Cathay Capital Private Equity, Shenzhen Ping An Decheng Investment, Taiping Guofa Capital and Huatai Ruilian Fund Management were previously identified as among those supporting the Meinian bid.

Ligang Zhang, iKang's founder and CEO, initially teamed up with FountainVest Partners last August to submit a bid of $17.80 per share. The move came just four months after iKang listed in the US. The Meinian consortium then offered $22.00 per share, prompting iKang's management to announce a rights issue, or "poison pill" strategy, intended to thwart the rival bid. The Meinian consortium came back with an offer of $23.50 per share.

The Zhang-led group has yet to improve on its $17.80 bid, but earlier this week Alibaba Group, Ontario Teachers' Pension Plan (OTPP), China Life, Legend Capital, New China Capital International and LTW Capital Jaguar Investment joined the consortium.

Set up in 2004, Beijing-based iKang provides medical examination services through 80 self-owned medical centers in 22 cities, as of November 2015. Outpatient services and dental treatment are also provided by a minority of these centers. Third-party service providers are used in 150 cities.

As of June 2015, Zhang held a 12.95% stake in iKang, while Boquan He, the company's vice chairman, had 13.23%. GIC Private owned 5.96%. However, Zhang has 34.5% of the total voting power.

IKang raised $153 million in a US IPO in April last year, allowing NewQuest Capital Partners and GIC to make partial exits. Goldman Sachs, another PE backer, didn't sell any shares in the offering, while an investment vehicle controlled by China Investment Corporation (CIC), bought $40 million worth of shares, representing a 4.6% stake.

The company reported revenue of $290.7 million in 2015, up from $202.3 million the previous year. It also generated a net profit of $26.8 million compared to losses of $6.1 million and $75 million in 2014 and 2013.

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• Topics
• Buyouts
• Healthcare
• Greater China
• buyout
• China
• healthcare
• Ping An
• Cathay Capital Private Equity
• Sequoia Capital