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Vision Eye Institute offered $1.10 per share from China’s Jangho Group Co

The $1.10 price is a 64% prium to the one month volume weighted average price of $0.67, and values the company at around $200 million.
Jangho presently holds a 19.99% stake in Vision.
The offer trumps the existing all-scrip bid from hospital operator Pulse Health Limited.
Jangho currently owns a 19.99% stake in Vision which it acquired from Primary Health Care Limited in July this year for 94 cents per share.
A detailed independent expert report, which was commissioned by Vision following Pulse’s bid, assessed the control value of Vision shares being in the range of $1.04 per share to $1.18 per share.
However the close relationship between fund manager Viburnum and Pulse may mean the bid is doomed to fail anyway; Mr Craig Colan is both a director of Pulse and Viburnum. ??Because the fund manager proposed the tie-up between Pulse and Vision in the first place, it may also see more value in the combined group than Jangho is willing to pay.
Commenting on the bid, Vision Eye said: “The Jangho offer highlights the strategic value of our business, in particular its day-surgery clinics, the program of strategic initiatives being undertaken and Vision’s strong prospects for future growth. “Further, Vision has a long history of charitable, philanthropic and educational activities in SE Asia and the proposed partnership with Jangho provides further opportunities to build on and expand these activities.”
Vision Eye intends to recommend that shareholders accept the Jangho offer, subject to there being no superior alternative proposal.
Pulse may have been outbid by Jangho for Vision but could still have the last laugh with its voting control over 16.45% of Vision’s shares, thanks to an agreent with fund manager Viburnum Funds.
In Pulse’s offer document, Viburnum is noted as the party that conceived the merger of Pulse and Vision and presented it to Pulse to undertake, ‘in the interests of creating value for shareholders in both Pulse and Vision’. Viburnum held 28.6 million (15.9%) shares in Vision Eye at the time of the offer, and around 30% of Pulse Health.
Additionally, Viburnum would be paid up to $1.35 million as a sub-advisor to Pulse if the takeover was successful.
Without Viburnum’s shares, Pulse’s offer was likely to fail, and unless Viburnum Funds is ready to take the higher offer from Jangho and potentially damage its relationship with Pulse’s board, Jangho’s bid may not succeed.The Jangho offer is not subject to any funding conditions or any regulatory approvals, including FIRB.

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