• A doctor helps a patient at a clinic in Guangsong Village of Dai-Jingpo Autonomous Prefecture of Dehong, southwest China's Yunnan Province, Nov. 17, 2011.

A doctor helps a patient at a clinic in Guangsong Village of Dai-Jingpo Autonomous Prefecture of Dehong, southwest China's Yunnan Province, Nov. 17, 2011. (Photo : Xinhua)

Jiangsu Sanyou Group Co. Ltd., China’s largest provider of preventive health examination services, has formed a consortium to submit a non-binding $1.5 billion cash offer for local rival iKang Healthcare Group Inc., the Beijing-based China Daily newspaper reported on Tuesday.

The consortium plans to acquire all outstanding shares in iKang for $44 per share, or $22 per American depositary share (ADS), according to the proposal.

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The price is 24 percent higher than the August bid of $17.8 per ADS for iKang, which was made by the company's founder and chairman Zhang Ligang. Shares in the Beijing-based but NASDAQ-listed iKang closed at $16.77 in the previous week in the New York Stock Exchange.

Jiangsu Sanyou, also known as Meinian Onehealth Healthcare (Group) Co. Ltd., listed in the Shenzhen Stock Exchange in 2005 to become China's first A-share listed health examination services company. Trading in its shares were suspended on Monday.

In a published statement, Zhang said he would not sell the shares he owns or controls to any third parties and did not support any competing offers.

"The acquisition is hostile, and the consortium knows that the management team of iKang does not support the deal," Zhang said. "The competition between iKang and Meinian is becoming increasingly fierce."

"This acquisition might help Meinian gain improper competitive advantage by creating interference for employees and customers of iKang. We will make every effort to protect iKang, and have the ability to run independently."

Meinian operates more than 100 health check centers in 50 cities across China, and had 5.28 million clients in 2014, while iKang claimed to provide healthcare services to 3.6 million people.

In September, Meinian announced it was acquiring 72.22 percent of Ciming Health Checkup Management Group, China's third-largest medical examinations agency, although a deal has yet to be officially completed.