Link’s most valuable asset is a 42.8% stake in electronic property settlement firm PEXA, a near-monopoly electronic transfer operator in Australia. PEXA is fully listed on the ASX.
Dye & Durham first made an agreed takeover offer for Link in December, then revised it down to $4.81 per share in July to reflect a sharp reduction in tech stock valuations and overall stock market weakness. as central banks raised interest rates around the world.
Woodford collapse looms on the horizon
Nearly a week ago, he made another revised proposal that contained a two-part deferred payment mechanism, after FCA’s request for $519 million in funds to be set aside following the collapse of a Woodford retail fund in the UK. This Woodford Equity Income Fund, which was frozen in mid-2019, was administered by Link’s UK subsidiary, Link Fund Solutions. But Link’s board rejected the two-part payment option.
Two UK law firms, Leigh Day and Harcus Parker, are suing the subsidiary in UK courts in a separate class action on behalf of 20,000 retail investors.
The FCA have investigated the collapse of the £3.7billion fund managed by deposed star manager Neil Woodford. Once known as the ‘Oracle of Oxford’ after a 25-year career as a fund manager at Invesco Perpetual, Mr Woodford had a large following among retail investors when he went freelance .
LFS froze the fund because investors were rushing to exit after losses mounted, and amid fears that the fund’s illiquid holdings would prevent clients from withdrawing their money.
The global dye & The Durham takeover had a September 30 deadline for all issues to be settled, under the original terms of the program’s implementing act.
Under the latest revised dye & Durham’s offer, Link shareholders would receive the equivalent of $3.81 per share in cash up front and defer the remaining $1 for two years to meet potential payments related to the Woodford funds. Link told the ASX on Sept. 19 that its board was unable to recommend the new proposal after considering issues relating to “the value, structure and alternatives available to Link Group.”
The last deal falls apart
The dye & The Durham deal was Link’s fourth takeover proposal in two years.
US private equity firm The Carlyle Group pulled out after weeks of detailed due diligence late last year after an initial bid of $5.38 a share. This offer consisted of two elements: $3 for Link’s core business and a pro rata distribution of Link’s stake in PEXA to Link shareholders.
In late 2020, Carlyle and Pacific Equity Partners sued Link in a combined tilt in which an indicative offer reached $5.40. US group SS&C Technologies made a $3 billion takeover bid at the end of 2020, but pulled out after a month of due diligence.