Ann: Non-binding indicative proposal for acquisition of Healius, page-21

AFR says bid probably hostile:

Jangho first made waves in 2015 with its $198 million acquisition of ASX-listed eyecare group Vision Eye Institute. In that deal Shanghai-listed company bought its cornerstone 19.99 per cent stake in Vision Eye from Primary.

According to one source, Jangho – which is one of the world's largest curtain wall manufactures – is interested in local healthcare assets due to its high growth and diversification away from the building sector.

Over the past two years sources said that Jangho was interested in making a bid for Healius but ran into trouble getting the needed funds out of China.

An industry source said while financing such a large deal may have been prohibitive in the past for Jangho, the falling Healius share price had made the deal more palatable today.

In November 2016 Jangho told The Australian Financial Review that "In Australia, we will make more investments."

Jangho did not respond to calls from theFinancial Review on Thursday.

Since its Vision Eye deal, it has snapped up a stake in Primary, and more recently bought into IVF player Monash IVF.

One source speculated that the timing this early in the New Year, was there to take Healius by surprise.

"This is clearly a hostile bid," he said. "Jangho has had enough of the performance (issues) and debacles at Primary. They timed the bid to catch them on the hop."

Another source confirmed this took the board by surprise.

"There has not been any expectation that this was likely to come now," he said.

However, any formalised offer that may come could be met with skepticism given given the state of China's relationship with Australia.

One can not ignore the current political landscape with the government last last year blocking CK Group's $13 billion takeover bid for gas pipeliner APA Group.

Then there is Chinese telco Huawei Technologies, which recently lashed out at several Western nations, including Australia, for their "incredibly unfair treatment".

Australia and New Zealand have banned Huawei from building their 5G networks on national security grounds. Several other countries have expressed concerns that its equipment could be used by Beijing for spying, which Huawei has repeatedly denied.

One source said that given Healius' pathology business filters 15 million patient requests per annum and its the second largest medical centre operator in Australia, there is likely to be push back from government.

"You are talking about millions of sensitive patient data points," he said. "They would be very cautious about releasing any of this data to the Chinse government, which really is what Jangho is."