Two competing private equity groups are set to place their final bids on Friday for Australia's second-largest hospital owner Healthscope Ltd (ASX:HSP) in a $US1.6 billion ($A1.8 billion) deal, according to sources.

Offers are expected from buyout firm Kohlberg Kravis Roberts & Co and a consortium comprising TPG and Carlyle. The former lodged an indicative bid at $5.80 a share. TPG and Carlyle initially proposed $5.75 a share in May.

The TPG and Carlyle consortium are expected give a final offer even as private equity firm Blackstone Group withdrew from the alliance late on Thursday, with reports citing Blackstone was not comfortable with the $5.75 indicative bid.

"TPG and Carlyle are working towards putting a bid in at [1700 AEST]," a source told Reuters on Friday.

Uneasiness about the debt market and government decisions to cut subsidies for blood tests and drugs is weighing on the bids for the hospital operator.

But after more than a month of studying Healthscope's books, both suitors have finalised details of the financing packages, according to banking industry sources.

Healthscope, which owns 43 hospitals or 15 per cent of the private hospital market, is the country's third-largest pathology business.

Its shares edged down 1.9 per cent, against a flat broader market, to $5.31, after news about difficulties with financing the deal worried investors. The price was 7.6 per cent behind the lower of the two initial bids.

Prior to the indicative bids, Healthscope was trading at around $4.30.