Changes are happening - please bear with us while we update our site.

Changes are happening - please bear with us while we update our site. Click here to give us your advice and feedback.

Link (ASX:LNK) snapped up by Dye & Durham for $3.5 billion

Link Administration Holdings Ltd (ASX: LNK) is set to be acquired by Canadian headquartered Dye & Durham for AU$3.5 billion (C$3.2 billion). Here are the key details.

Link Administration Holdings Ltd (ASX: LNK) is set to be acquired by Canadian headquartered Dye & Durham for AU$3.5 billion (C$3.2 billion).

This morning, the Link share price entered a trading halt pending a “potential control transaction”.

Subsequently, the business announced it had entered into a Scheme of Arrangement with Dye & Durham.

D&D with a bumper offer

Link shareholders will receive the following as consideration:

  • Base consideration of $5.50 per share in cash plus a $0.03 per share interim dividend fully franked
  • A $0.08 per share special dividend fully franked, which will be deducted from the base consideration
  • Potentially $0.15 per share from the sale of the Banking and Credit Management (BCM) division

The deal values Link’s equity at $2.9 billion and implies an enterprise value of $3.6 billion on a fully diluted basis.

The purchase price represents a 15% premium to Link last trading price and a 27% jump from its resting share price before it received a $5.38 per share bid from Carlyle Group.

As part of the deal, Dye & Durham will acquire Link’s 42.8% shareholding in PEXA Group Ltd (ASX: PXA).

LNK share price

Source: Rask Media LNK 5-year share price
Source: Rask Media LNK 5-year share price

Commenting on the acquisition, Matthew Proud, CEO of Dye & Durham said:

 “This transaction will enable us to expand our proven model into adjacent markets, where Link Group’s products share the same attributes of our existing offering: digital infrastructure-like assets that provide essential services to clients and their customers…”

Lurking in the shadows

Dye & Durham’s decision to purchase Link is a surprise to most of the market, given Carlyle Group was provided due diligence to come to the table with a better offer.

Known to few at the time, Dye & Durham also expressed its interest in Link Group with a condition of commercial confidentiality.

After five weeks, Link had heard nothing from Carlyle. And Dye & Durham had put a superior offer on the table.

The Link Board has endorsed the deal to shareholders, in the absence of a superior offer and independent expert ticking off the deal.

My take

Dye & Durham, might be purchasing Link, but it looks like PEXA is the main prize here.

Per Dye & Durham’s own “About Me” section, PEXA fits this description more than the remainder of the Link business:

“Dye & Durham is a leading provider of cloud-based software and technology solutions designed to improve efficiency and increase productivity for legal and business professionals”.

This is supported by the Canadian company’s willingness to pass on net proceeds from the BCM division sale and its future divestment of the Funds Solutions Business.

There has already been substantial private equity demand over the past 18 months for the core Link assets.

Possibly, Dye & Durham will spin off those assets and go after the remainder of PEXA?

Overall, it looks like a win for Link shareholders given the share price has been on a downhill slope for the better part of five years.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, Lachlan does not have a financial or commercial interest in any of the companies or funds mentioned.
Skip to content