The Link Administration Holdings Ltd (ASX: LNK) share price could be one to watch on Friday.
This follows the release of an update on its PEXA business after the market close yesterday.
What did Link announce?
According to the release, Link has received a proposal for its 44.18% stake in the PEXA business from private equity firm Kohlberg Kravis Roberts (KKR). Property listings company Domain Holdings Australia Ltd (ASX: DHG) is expected to team up with KKR on the deal.
The release explains that KKR's offer values the PEXA business at $3 billion plus cash on the balance sheet on a 100% basis. PEXA had $126 million of cash on its balance sheet at the end of March.
This would value Link's stake at approximately $1.32 billion.
Proposal conditions
KKR's offer comes with a number of conditions.
These include the agreement on transaction documentation, including a Sale and Purchase Agreement, Foreign Investment Review Board approval and relevant approvals from the State land registries, and an agreement by PEXA shareholders to a number of actions and waivers under the existing PEXA Shareholders' Deed.
It is also conditional on the IPO of PEXA not proceeding.
What now?
KKR advised that the proposal remains open and is capable of acceptance until 5:00pm on Sunday 30 May 2021.
Link has said that it is considering the proposal and is obtaining advice from its financial and legal advisors.
However, as no decision has been made, both the trade sale process and exploration of the viability of an IPO continue to proceed.
The Link Board advised that they will continue to act in the best interests of the company and seek to maximise the value of its PEXA investment.
The company intends to keep the market informed of any material developments in accordance with its continuous disclosure obligations.
