The Link Administration Holdings Ltd (ASX: LNK) share price dropped by 13% yesterday.
Link is one of the largest financial service and admin providers in Australia. It has some of the largest superannuation funds as clients.
What happened?
Link gave an update about the conditional, non-binding indicative proposal from SS&C Technology Holdings to acquire the whole of Link.
SS&C is a NASDAQ listed global provider of investment and financial software-enabled services and software for the financial services and healthcare industries. It has 150 offices in 35 countries. The indicative cash price offered to shareholders under the proposal was $5.65 per share.
On 3 January 2021, Link received a letter from SS&C stating it has withdrawn its offer.
Link said it will continue to consider all alternatives to maximise value for shareholders. That includes a potential separation by way of a demerger of Link’s interest in Torrens Group Holdings (TGH) and its core asset PEXA. It will also explore a trade sale in the interest of TGH from 18 January 2021.
So, no takeover?
A takeover could still go ahead, though this doesn’t seem that likely.
Remember, a consortium comprising Pacific Equity Partners, Carlyle Group and their affiliates offered anindicative cash price to shareholders of $5.20 per share, which was a 30% premium to the closing price at the time. That offer received the approval of substantial shareholder Perpetual Limited (ASX: PPT) which held 9.65% of Link at the time.
However, it’s worth pointing out that Link’s board thought the SS&C proposal of $5.65 per share didn’t represent compelling value for shareholders on a control basis. So it’s even less likely that the $5.20 offer from the consortium will be accepted.
Perhaps the consortium will come back with an offer just high enough to be accepted. Or perhaps Link will knock it back.
Link is going through some challenging times at the moment, so unless there’s another takeover offer I don’t think the Link share price will go back above $5.50 for some time. There are plenty of other ASX growth shares and ASX dividend shares I’d rather buy such as Magellan Financial Group Ltd (ASX: MFG).
