Link Group knocks back takeover offer to look at other options

LINK Group has knocked back the revised $4.57-a-share offer from Canadian suitor Dye & Durham, saying there are alternatives for the business if the deal doesn’t go ahead.

Updating the market on the deal on Monday, Link said it was unable to recommend the transaction at the proposed price following feedback from shareholders and noting the underlying value of the business as provided by independent financial expert Deloitte.

In a report released just weeks ago, Deloitte valued Link at between $4.81 and $5.97 a share.

“Link Group advises the market that the board is unable to recommend a $4.57 per share transaction for the control of Link Group, as offered by Dye & Durham,” the company said.

“Link Group is continuing to engage with Dye & Durham in relation to whether an agreed position can be reached on the matters raised in Dye & Durham’s letters, noting any agreed reduction to the scheme consideration proposed will be subject to Dye & Durham having proposed, and working with the ACCC on an ongoing basis to ensure it puts into effect, undertakings which satisfy the ACCC’S concerns.”

Link also raised the possibility of alternatives for the business if the takeover falls through, including an in-specie distribution of a minimum of 80 per cent of Link’s shareholding in PEXA, in order to maximise value for shareholders.

Dye & Durham returned last Thursday with the higher offer just three days after Link knocked back its $4.30-a-share bid. That $4.30 offer, submitted in late June, was a more than 20 per cent drop on the original $5.50-a-share price the Canadian firm said it would pay earlier this year.

The reduced offer price was partly due to recent weakness on financial markets, Dye & Durham said, but investors and analysts labelled it too low, with one shareholder telling The Australian it was a “smartass bid” and that at $4.30 a share, “that’s not a clearing price for the assets”.

The ACCC in June outlined its “significant preliminary competition concerns” over the takeover, centred around Link’s shareholdings which the regulator said could hinder competition through “mutual preferential dealing”.

Link shares were up 0.2 per cent to $4.03 in early trade.