TPG and the investment arm of the Johor government have been unable to agree on the terms of the potential purchase of Malaysia’s largest private-hospital operator including its valuation, said the source.

Market volatility also weighed on the potential buyout, they said, asking not to be identified as the process is private.

TPG and Johor Corp had been considering a deal for KPJ last year and discussed financing for the transaction with banks, Bloomberg News reported. KPJ has a market value of about RM3.2 billion after its shares fell nearly 26% this year, a greater decline than the 9% drop suffered by the benchmark FTSE Bursa Malaysia KLCI Index.

Negotiations could still resume and other parties could be interested in pursuing KPJ, the people said.

Johor Corp is committed to improving the business prospects of KPJ, and will make any pertinent updates according to disclosure requirements, said Hasnina Hafiz, head of group corporate communications, in response to a query from Bloomberg News. Representatives for KPJ and TPG declined to comment.

A halt to talks would mark the second healthcare deal in the Southeast Asian nation to see negotiations break down in recent weeks. Australia’s Ramsay Health Care Ltd and Sime Darby Bhd said discussions with IHH Healthcare Bhd to buy out their joint venture in Asia have concluded and didn’t result in a binding agreement for the sale of Ramsay Sime Darby.

Johor Corp owns nearly 36% of KPJ as of April, data compiled by Bloomberg show. Other major shareholders include the Employees Provident Fund Board and Kumpulan Wang Persaraan Diperbadankan (KWAP).

Founded in 1981 as the first specialist private hospital in Johor, KPJ owns more than 28 specialist hospitals located throughout Malaysia, according to its website. The healthcare provider also has investments in hospitals in Indonesia, Thailand and Bangladesh as well as in a retirement resort in Australia.