Link share

Link’s stock price falls on takeover rejection

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The Link Administration Holdings Ltd (ASX: LNK) the stock price is trading lower on Monday morning.

In early trading, shares of the administrative services company were down 2% at $3.72.

Why is Link’s stock price falling?

Investors sold Link’s share price on Monday after an update on the takeover was released.

This relates to the receipt of an amended proposal from Dye & Durham last week which saw the suitor reduce its tender offer from $5.50 per share to $4.30 per share.

Dye & Durham reduced its offer to reflect a proposed commitment to the ACCC to obtain approval, the current state of the financial markets and the value of the shares of Link and PEXA Group Ltd. (ASX:PXA).

What’s the latest?

As you might have guessed from the weakness in Link’s stock price this morning, today’s update was not positive.

According to the statement, Link’s board of directors carefully considered Dye & Durham’s proposal. This includes consideration of stakeholder feedback, changes in equity market valuations and available alternatives for Link if the transaction does not proceed.

After considering all of these factors, Link’s Board of Directors does not believe it can recommend a trade of $4.30 per share.

However, he continues to engage with Dye & Durham. And if a commitment is offered by Dye & Durham to the ACCC that Link says will address the competition regulator’s concerns, he would be willing to consider a higher offer.

Nevertheless, in light of these developments, the company has canceled the program meeting that was scheduled for next week.

What are the alternatives ?

The release notes that if the program does not continue, Link intends to evaluate alternatives for the company.

A potential alternative is a cash distribution of a minimum of 80% of Link’s stake in PEXA.