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Should you buy Vision Eye Institute Ltd shares today?

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Vision Eye Institute Ltd (ASX: VEI) has reported its results for the year ended 30 June 2015, revealing a 2.1% increase in revenue and a 22.6% increase in underlying net profit after tax (NPAT).

The group’s revenue rose to $112.9 million, while its underlying NPAT lifted to $14.5 million, although the reported profit actually fell 8.9% compared to the prior year. This was impacted by a $2.5 million goodwill write-down (related to Gold Coast clinics which have recently been sold) and a $1.9 million insurance claim that benefited the group’s overall earnings in the 2014 financial year (FY14).

Despite the results, the share price barely budged with the stock ending the day at $1.07. This is because of an all-cash takeover offer recently launched by the Shanghai-listed Jangho Group.

Jangho, which recently purchased a 19.99% stake in the business from Primary Health Care Limited (ASX: PRY), offered to pay $1.10 in cash per share for each of the shares it doesn’t already own, exceeding the 88 cent per share bid previously lodged by Pulse Health Limited (ASX: PHG).

While the deal is no certainty to go ahead, Vision Eye’s Board of directors unanimously recommended that shareholders accept the offer in the absence of any superior proposals. Unfortunately for investors, the board has also established that a payment of a special dividend in conjunction with the takeover offer was not feasible.

With Vision Eye’s shares trading within 3 cents of Jangho’s bid-price, investors may be better off looking for superior investment opportunities elsewhere. Thanks to the market’s recent crash, ASX stocks haven’t looked this appealing in years…

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Motley Fool contributor Ryan Newman has no position in any stocks mentioned. 

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.

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