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A revised $2.46 billion offer for Link Group (ASX: LNK) from acquisitive Canadian software group Dye & Durham has been backed by the board of the Australian company, despite competition concerns for the property settlements market still hanging over the deal.
The board of Link Group, the largest provider of superannuation fund administration services and share administration services in Australia, has a accepted the latest $4.81 per share offer which is up from a $4.57 bid earlier this month.
Although the price is well below the original $5.50 originally proposed by Dye & Durham late last year, Link shareholders will also receive up to 13c a share from the $86.5 million sale of the company’s Banking and Credit Management (BCM) business which has yet to be finalised.
Under the revised scheme announced by Link today, Dye & Durham remains obligated to use its ‘best endeavors to pursue the sale of the BCM business’ for up to 12 months after the scheme is implemented.
The latest price is the third takeover offer from Dye & Durham which first took an interest in Link Group late last year following two failed takeover attempts by US multinational private equity firm The Carlyle Group – and an earlier tilt by private equity group KKR the year before.
Among the key assets sought by Dye & Durham, which provides cloud-based software and technology services in the UK, Canada, Ireland and Australia, is Link Group’s 42.77 per cent stake in property settlements services operator PEXA Group (ASX: PXA).
Dye & Durham already operates in the Australian property settlements market following its acquisition of GlobalX last year. The Canadian company is said to be looking to offload the business to appease competition concerns about its Link takeover.
The Australian Competition and Consumer Commission (ACCC) has already put Dye & Durham on notice regarding the Link Group buyout, citing its potential to lessen competition.
Dye & Durham is facing similar competition issues in the UK where the Competition and Markets Authority is forcing the company to sell property search and conveyancing company TM Group, which it acquired last year, with the authority finding that the purchase could lead to higher prices for property settlements in the UK.
In Australia, Dye & Durham provides information broking services, conveyancing and legal practice management software and manual property settlement services. PEXA operates an electronic lodgement network, which facilitates digital conveyancing settlements.
The Link board has unanimously recommended shareholders vote in favour of the revised scheme in the absence of a higher offer. This is still subject to an independent expert determining that the offer is fair and reasonable.
The takeover is also subject to court approval as well as regulatory approvals from the ACCC and the UK Financial Conduct Authority.
A meeting of shareholders to vote on the scheme is expected to be held in August.
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