Should you buy Veda Group Ltd at this share price?

Credit: Mighty Travels

Veda Group Ltd (ASX: VED) has entered into a binding agreement with Equifax Inc whereby Equifax will acquire 100% of Veda Group’s outstanding shares.

Veda Group is one of Australia’s leading data analytics businesses, providing information to its clients regarding the credit histories of would-be customers. It listed on the ASX in 2013 with plenty of promise, particularly in light of the introduction of the Comprehensive Credit Reporting regime which provided a new avenue for growth.

In today’s announcement however, the board said that it unanimously recommended that shareholders vote in favour of the scheme being implemented. The decision implies the board’s belief that the price being offered takes into consideration the company’s growth potential over the coming years.

Equifax first launched a takeover bid for Veda Group in September this year, offering $2.70 per share outstanding. The price has since been increased to $2.825 per share, which implies a market capitalisation of roughly $2.5 billion for Veda Group, and represents a 41.6% premium over Veda Group’s closing price of $1.995 per share prior to the first offer being made.

As it stands, the shares are still trading roughly 2.7% below the offer price. While some investors will no doubt look to take advantage of the difference in price, it seems investors would now be better off looking elsewhere for superior returns.

Get our #1 Dividend Stock for 2015-16 - FREE!

Rather than buying Veda Group, you should know that Scott Phillips, lead advisor for Motley Fool Share Advisor, has just named his #1 dividend stock for 2015-2016, and I think it's a GREAT BUY today! To find out more about this ultra-promising company, simply click here now, enter your email address, and we'll send you Scott's brand-new free report. 

This is a FREE service offered by The Motley Fool. No credit card details or payment required

Motley Fool contributor Ryan Newman has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. 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.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.