Viburnum to receive $31m for Vision

Perth-based Viburnum Funds looks set to receive roughly $31.4 million for its shares in Australian ophthalmology company Vision Eye Institute after Vision announced an agreed takeover bid by Chinese firm Jangho.

The new bid has led to Pulse Health, of which Viburnum is the largest shareholder with over 29.8 per cent of the company, to withdraw its previous takeover offer for Vision.

The Wyllie Group-founded investment manager Viburnum is the second largest shareholder in Vision, after Jangho, with 15.9 per cent of company’s shares.

At midday in Perth Vision shares were trading at $1.077, up 15.7 cents following the news late yesterday of the $1.10 a share takeover offer.

Vision’s board released a statement yesterday recommending shareholders accept the offer, and reminded them that it had previously recommended rejecting the earlier scrip offer by Pulse Health.

Viburnum was involved in Pulse’s unsolicited scrip-based takeover bid for Vision, which was announced on July 6.

Vision’s August 4 target statement, made in response to Pulse’s offer, states that Pulse’s financial advisor to the offer, Allier Capital, had subcontracted Viburnum to advise Pulse.

Under the arrangement Viberum would be paid an initial $100,000 retainer with an additional $1.125 million success fee should Pulse have successfully acquired over 50 per cent of Vision.

At midday Pulse shares were down slightly, trading at 52 cents a share, putting the implied price of the offer of 1.6 shares for every Vision share at 83.2 cents a share.

Curtain wall manufacturer Jangho became Vision’s largest shareholder when it purchased Primary Health Care’s 19.9 per cent stake on July 31 for $33.8 million, a price of 94 cents a share.

Following Jangho’s initial acquisition it entered into talks with Vision that have yielded yesterday afternoon’s announcement.

In response to the unsolicited bid by Pulse, Vision brought in independent expert Lonergan Edwards to perform a valuation.

Vision released Lonergan Edwards’ findings in its target statement on August 4, which put Vision’s value in the range of $1.04 to $1.18 a share, well above the initial 88 cents a share implied value of Pulse’s scrip offer.

On August 6 Pulse responded to the target statement stating that the valuation was based on unsubstantiated claims regarding Vision’s future growth and 2016 guidance.