Link share price drops on takeover rejection

Link has rejected a takeover offer from Dye & Durham…

| More on:
A man stands with his arms crossed in an X shape.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Link shares are dropping on Monday morning
  • This follows news that the company has rejected Dye & Durham's takeover approach
  • Lat week Dye & Durham reduced its offer from $5.50 per share to $4.30 per share

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

In early trade, the administration services company’s shares are down 2% to $3.72.

Why is the Link share price sinking?

Investors have been selling down the Link share price on Monday following the release of a takeover update.

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

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

What’s the latest?

As you might have guessed from the Link share price weakness this morning, today’s update has not been a positive one.

According to the release, the Link board has carefully considered Dye & Durham’s proposal. This includes considering feedback from stakeholders, changes in share market valuations, and alternatives available to Link if the transaction does not proceed.

After considering all these factors, the Link board does not believe it is able to recommend a $4.30 per share transaction.

Though, it is continuing to engage with Dye & Durham. And if an undertaking is proposed by Dye & Durham to the ACCC which Link considers will satisfy the the competition regulator’s concerns, it would be willing to consider a higher bid.

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

What are the alternatives?

The release notes that if the scheme does not proceed, Link intends to evaluate alternatives for the business.

One potential alternative is an in specie distribution of a minimum of 80% of Link’s shareholding in PEXA.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Link Administration Holdings Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Mergers & Acquisitions

One young boy jumps off a step ladder and is captured mid-air about to land on a seesaw where his friend is standing with a wide smile on his face looking at the camera and holding his thumbs up as though he is excited for the ride to come. Both young boys are wearing business suits.
Mergers & Acquisitions

Nearmap share price jumps 30% on takeover news

The Nearmap share price rallied 33% to $2.01 in early trade on Monday, but remains below the bid price.

Read more »

A frustrated young woman shopper holds her hands up with a pained, annoyed expression on her face as she stands next to her trolley in a grocery store and examines the stock offerings on the shelf in front of her.
Mergers & Acquisitions

Woolworths share price slides following MyDeal ACCC nod

MyDeal shareholders will vote on the proposed acquisition next month.

Read more »

A person with a round-mouthed expression clutches a device screen and looks shocked and surprised.
Consumer Staples & Discretionary Shares

iSelect share price explodes 75% on takeover news

The iSelect share price is sky high after the company revealed a takeover offer from the owner of www.comparethemarket.com.au.

Read more »

Two men in business attire play chess.
Resources Shares

OZ Minerals ‘completely in play’: Broker on BHP takeover bid

BHP's bid for OZ Minerals may not be over...

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
Mergers & Acquisitions

Macquarie share price slips despite rumours $3.7 billion acquisition imminent

French company Veolia is divesting itself of the assets to resolve antitrust concerns raised in May by UK regulators.

Read more »

Woman looks amazed and shocked as she looks at her laptop.
Mergers & Acquisitions

The OZ Minerals share price is rocketing 35% after BHP bid

Despite knocking back a takeover bid, OZ Minerals shares are going nuts.

Read more »

An investor looks happy holding a finger to his computer screen while holding a coffee cup in a home office scenario.
Mergers & Acquisitions

BHP share price lifts as $8.3b takeover bid rejected

The iron ore giant proposed to snap up its ASX 200 copper-focused peer for $25 per share.

Read more »

A man stands with his arms crossed in an X shape.
Mergers & Acquisitions

OZ Minerals share price on watch after miner rejects BHP’s $25 per share takeover offer

OZ Minerals has rejected BHP's takeover offer...

Read more »