Loss-making insurance outsourcing company Xchanging is at the centre of a bidding war between larger rival Capita and US private equity group Apollo Global Management.

Xchanging has received non-binding conditional proposals from both parties and granted them due diligence access, it says in a filing to the London Stock Exchange.

“There can be no certainty that any offer will be made, nor as to the terms of any such offer,” Xchanging says. “Further announcements will be made in due course, as appropriate.”

Capita says Xchanging “confirmed that it would be willing to recommend” its final cash offer of 160 pence ($3.41) per share, which values the company at about £396.56 million ($844.31 million) based on the closing share price on September 24.

“The board of Capita believes the acquisition… would be consistent with Capita’s stated strategy of acquiring businesses that build capability in existing operations, allow Capita to enter new, attractive industry segments and enhance its future organic growth potential.”

Apollo has tabled a higher cash offer of 170 pence ($3.62) per share, giving Xchanging a market valuation of about £421.35 million ($897.09 million).

Capita says its offer is final, but it has left the door open for a revised bid should a third party make a firm offer.

“There can, however, be no certainty the offer will be made,” Capita says.

Capita first made an offer of 140 pence ($2.98) per share in August, but was rebuffed by the Xchanging board, which decided the price undervalued the business and prospects.

It has raised the bid three times before being granted due diligence access.

Xchanging made a net loss of £41.1 million ($87.56 million) in the half-year to June 30, down from a net profit of £24.2 million ($51.55 million) in the corresponding period last year.

Hewlett-Packard executive Craig Wilson has been appointed CEO-designate as the company seeks to reverse its fortunes.

He will join the board next month and formally assume the CEO seat on January 1, replacing Ken Lever.