KKR & Co. Inc. (NYSE:KKR) is close to acquiring HealthCare Global Enterprises Limited (NSEI:HCG), the country's largest speciality cancer care hospital chain, from another private equity firm CVC Capital Partners plc (ENXTAM:CVC), said people aware of the matter. The development comes less than six months after KKR made a return to the Indian hospital sector, after a gap of two years The private equity firms are aiming to sign binding documents this month, latest early January.

Trumping a rival bid by Bain Capital, KKR entered into an exclusivity pact in late October with CVC for bilateral negotiations to acquire CVC?s 60.36% stake at a price of INR 425-INR 450 per share. This is at a 10%-15% discount to the INR 509.85 of December 3, 2024 closing price, which translates into a market value of INR 71,066.3 million. But the stock has surged 43% in the last six months on the back of a strong financial performance and expectations of a sale.

In the past month alone, HCG shares have risen 14%. With the promoters ? CVC and the founding family ?

owning a 71.23% stake, KKR is expected to launch an open offer for another 26% of the firm after the acquisition. Initially Ajaikumar may not sell, but if the new promoter group led by KKR crosses the 75% threshold, then the founding family may pare its stake leaving the US buyout group as the sole promoter. The transaction may involve an eventual delisting of HCG in case the open offer is fully subscribed to and after the takeover, KKR?s shareholding exceeds 90%, they added.

Bain had given CVC a firm offer in October but KKR is said to have bettered that with favourable terms for key shareholders. However, the KKR offer is subject to gaining control. CVC had acquired a controlling stake in the hospital chain in 2020 for INR 10,490 million.

Its stake is worth INR 46,631.2 million at current value. KKR has been negotiating a plan with Ajaikumar that involves him stepping down as executive chairman for a non-executive position. Raj Gore, a Fortis Healthcare and Apollo Hospitals veteran, is expected to continue as chief executive.

People close to Ajaikumar said he wants to remain chairman. The family is expected to retain a partial stake to ride the future upside. The stock currently trades at 15 times FY26 ebitda, which is amongst the lowest in the industry.

Most analysts expect a significant rerating if KKR takes over. The prospect of a change in his executive role has been a sticking point, according to people familiar with the matter. Ajaikumar told ET that talks were in the ?works,?

adding, ?I made it clear, I am not selling.? KKR declined to comment. CVC didn?t respond to queries.