Link management (ASX: LNK) and Ramsay Health Care (ASX: RHC) fell 20% and 10%, respectively, on September 13. Their decline bucked the broader market trend as ASX shares generally rose, marking the stock market’s fourth consecutive day of gains. LINK and RCH shares plunged after each of their respective buyout trades came under serious question.
LINK shares sink as UK threatens to thwart Dye & Durham takeover
Link Administration provides administrative services to the financial sector in areas such as share register and investment funds. He has clients in Australia and the UK. Link has agreed to be acquired by the Canadian Dye & Durham for 2.5 billion Australian dollars.
Link shareholders recently voted overwhelmingly in favor of the transaction. However, the deal has run into issues that threaten its completion. The UK’s Financial Conduct Authority (FCA) will not approve the deal unless Link sets aside up to A$519 million to cover potential fines.
Link’s UK subsidiary, Link Fund Solutions (LFS), is under investigation which could lead to fines. Link rejected the FCA’s request, but the fight casts doubts on the deal as UK regulator approval is required to complete the deal.
Ramsay Health Care falls as KKR refuses to strengthen takeover offer
Ramsay, based in Sydney, provides healthcare services. It operates private hospitals and surgical facilities. The company has been in business since 1964 and operates in several countries.
US private equity firm KKR teamed up with other investors to place a takeover bid on Ramsay earlier this year. The recovery plan has since had a series of twists and turns. The group initially offered to acquire Ramsay for A$88 per share, but revised the offer downward after Ramsay reported lower annual profit. Ramsay pushed the KKR-led consortium to bolster its bid. So far, it’s been a stalemate, with neither side wanting to budge, leaving the matter up in the air.
Stock Price Prediction Link Administration
Link shares have dropped 15% over the past week and are down about 35% year-to-date. Despite doubts surrounding Link’s takeover by Dye & Durham, analysts have so far remained bullish on LNK shares. According to TipRanks analyst rating consensus, LNK stock is a hold based on two buys, three holds and one sell. Link Administration’s average share price forecast of AU$4.67 implies more than 30% upside potential.
The Link Administration stock receives positive mentions on financial blogs. Data from TipRanks shows that financial blogger reviews are 86% bullish on LNK, compared to an industry average of 70%.
Ramsay Health Care Stock Price Prediction
Shares of Ramsay have fallen more than 10% over the past week and are down about 12% year-to-date. Despite issues with Ramsay’s takeover of KKR, analysts still believe Ramsay shares are worth a place in investors’ portfolios. According to TipRanks analyst rating consensus, RHC stock is a Hold based on three buys and one Hold, and two sells. The average Ramsay Health Care stock price forecast of AU$78.93 implies nearly 25% upside potential.
Additionally, the Ramsay stock remains a favorite among financial bloggers. Data from TipRanks shows that financial bloggers’ views are 85% bullish on RHC, compared to an industry average of 69%.
With declining market values, ASX companies are becoming takeover targets for domestic and foreign investors. Therefore, if Link Administration’s and Ramsay Health Care’s current takeover deals fail, the company could still attract interest from other potential buyers in the future.