Private hospital operators IHH Healthcare IHHH.KL and Sunway...

Private hospital operators IHH Healthcare IHHH.KL and Sunway Medical Centre are among bidders for Malaysia's Island Hospital, which is owned by Asian buyout fund Affinity Equity Partners and could fetch $1 billion, two sources with knowledge of the matter said.

Non-binding bids were due June 11, the sources said. Private equity firms CVC Capital Partners and TPG Capital also submitted initial bids, one of the sources said.

Affinity will shortlist bidders for a next round and expects to conclude the sale by year-end, one of the sources said.

Both sources asked not to be identified because the process and discussions are not public.

Affinity and Island Hospital did not respond to requests seeking comment.

IHH, which is listed on the Malaysian and Singaporean bourses, said it does not comment on market speculation and will update the market if there are any material developments.

Selangor-based Sunway Medical, CVC and TPG declined to comment.

Southeast Asian healthcare assets are gaining favour as investors bet on the region's growing affluent and aging population and the sector's ability to weather the current challenging economic environment.

In November, Australia's Ramsay Health Care (RHC) and Malaysian conglomerate Sime Darby SIME.KL agreed to sell their stakes in their hospital joint venture, Ramsay Sime Darby Health Care, to Columbia Asia Healthcare for 5.7 billion ringgit ($1.21 billion).

Founded in 1996, Island Hospital is a 600-bed hospital in Penang, Malaysia, with over 80 full-time specialists, according to its website. Annually, it treats 400,000 patients and performed 15,000 surgeries.

Hong Kong-based Affinity bought the hospital in June 2015, according to its website. No transaction amount was disclosed.

Affinity, which manages assets and funds totalling $14 billion, invests mainly in Korea, Australia, New Zealand, Greater China and Southeast Asia, according to its website.

($1 = 4.7080 ringgit)