(Bloomberg) -- I Squared Capital has started due diligence on Hong Kong-listed HKBN Ltd., people familiar with the matter said, as the US private equity firm gears up to potentially make a formal offer for the broadband company.

I Squared plans to analyze HKBN’s financials and assets over the coming weeks before it makes a decision on whether to proceed with an offer, the people said, asking not to be identified discussing confidential information. Considerations are ongoing and no final decisions have been made, the people said.

A move by I Squared could trigger a bidding war for HKBN. Last week, state-owned China Mobile Ltd. bid to buy all HKBN shares at HK$5.23 each in cash, valuing the company at about $882 million.

A representative for I Squared declined to comment. HKBN didn’t respond to a request seeking comment, while HKBN’s shareholders MBK Partners and TPG Inc. declined to comment.

I Squared has sent a preliminary and non-binding indication of interest to HKBN and has been discussing terms of the proposal with the company, including the potential price. I Squared’s approach could be at HK$5 to HK$6 per HKBN share, people familiar with the matter have said.

HKBN’s shares have climbed 49% this year, giving the company a market value of HK$6.8 billion ($877 million).

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