EXCLUSIVE: Major iKang Investor Says Bidding War For Company 'Possible,' Has Been Purchasing Shares
Chinese healthcare solutions company iKang Healthcare Group (ADR) (NASDAQ: KANG) received a revised merger bid on Monday morning and shares are rising. The offer could give investors the confidence to demand equal to better prices for other United States-listed private Chinese companies.
A group of investors including Meinian Onehealth Healthcare, which completed a reverse merger with Jiangsu Sanyou Group in August, has raised its non-binding offer to purchase iKang at $23.50 per ADR. The group previously made an offer for $22 per ADR in November, according to Bloomberg.
"We are optimistic about the potential of China's preventive health industry," Meinian CEO Yu Rong said in a press release. "We believe that there are huge untapped market opportunities, and that the sector has entered a phase of industry consolidation."
iKang's performance over the last month is strong -- up almost 18 percent -- on the back of a developing bidding war.
Heng Ren: We Were Buying When Everyone Gave Up
The bid may not come completely unexpected for investors. Heng Ren Investments, a China-focused investment firm based in Boston that has a stake in iKang, tells Benzinga it was purchasing shares when "everyone gave up."
An official within the firm shared his reaction to the latest bid. "We believe Meinian is taking its attempt to gain control seriously," he said.
Heng Ren said the group is "proving [its seriousness] by understanding the value that needs to be equitably distributed to all shareholders to make this proposed buyout worthwhile for all -- not just exclusively enriching the buyers group."
Bidding War 'Possible'
The newest bid is just the latest in a chain of developments at iKang.
In August, iKang Chairman Ligang Zhang offered $17.80 per ADR for the company, later calling any competing offers "undoubtedly hostile."
When asked if a bidding war for iKang could continue with a revised offer from Zhang or an offer from another suitor entirely, Heng Ren said either scenario is "possible."
Shares presently trade near $19.50 per ADR.
The author holds no shares of the stock mentioned above. Image credit: Public Domain
Jennifer Lynn, Nick Donato and Jake Mann contributed to this report.
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