The Link Administration Holdings Ltd (ASX: LNK) share price will be one to watch on Friday.
Why could the Link share price rocket higher?
The Link share price could rocket higher today after it received a takeover approach.
According to the release, the company has received a conditional, non-binding indicative proposal from private equity firm, Carlyle Group, to acquire Link via a scheme of arrangement.
Carlyle Group has tabled an offer of $3.00 per share plus a pro rata distribution of Link's shareholding in PEXA Group Limited (ASX: PXA). The latter is valued at $2.38 per share on a look-through basis, bringing the total consideration to $5.38 per share.
This offer represents a 24.2% premium to the Link share price at yesterday's close, which bodes well for its performance on Friday.
What's next?
The release notes that the proposal remains subject to a number of conditions. This includes due diligence, the negotiation and execution of transaction documentation, securing debt financing, final investment committee approval from Carlyle, and certain regulatory and other approvals.
The Link Board intends to consider the proposal. This includes obtaining advice from its financial, legal, and tax advisers. As things stand, the company has not yet granted Carlyle with due diligence.
In the meantime, the company has suspended its on-market share buyback. As of yesterday's close, Link had bought back 23,238,691 shares for a value of ~$101.7 million. This represents just over two-thirds of the $150 million buyback.
As there is no certainty that a deal will be done, Link has advised shareholders that they do not need to take any action in relation to the proposal.
It intends to keep shareholders informed if there are any material developments in the future, as required under its continuous disclosure obligations.
