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Vision Eye Institute Ltd receives takeover offer: What you need to know

In something of a shock announcement, Vision Eye Institute Ltd (ASX: VEI) has requested that its shares be placed in a trading halt following a takeover offer from Pulse Health Limited (ASX: PHG), which has also entered a trading halt.

All details of the offer were spared by both parties with Vision Eye simply stating that: “The trading halt is requested pending an announcement by the company to the market in response to an unsolicited offer received from Pulse Health.”

Vision Eye Institute is an Australian-based provider of ophthalmic care, providing various treatments for people suffering eye disorders and diseases. Most recently, it posted an 11% decrease in profit after tax to $6.7 million on flat revenues for the six-months ended 31 December 2014, with the company currently sporting a market value of $121 million.

What makes this takeover offer so strange is that Pulse Health – which is an integrated health services provider with private hospitals, day surgeries and community home care – is roughly three-quarters of the size of Vision Eye with a market value of just $92 million.

In April, I said that Vision Eye could be one to keep a watch on (excuse the pun) not only because it is in a position to benefit from Australia’s ageing population, but also because it could become a takeover target. However, I suggested that Primary Health Care Limited (ASX: PRY) was the most likely company to make an offer given that it owned 22% of the business at the time.

In order for a deal to get over the line, it’s likely that Primary Health Care will want a significant premium to give up their stake in the business. As highlighted above, very few details have been released so far, so watch this space for any updates.

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Motley Fool contributor Ryan Newman has no position in any stocks mentioned. You can follow Ryan on Twitter @ASXvalueinvest.

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.