The Link Administration Holdings Ltd (ASX: LNK) share price is surging this morning on news Australia's competition watchdog will not oppose the company's acquisition.
Shares in the administrative technology company are currently trading 6.26% higher at $4.58 each after reaching an intraday high of $4.71 a share. That represents a 9.28% jump.
This morning, the Australian Competition & Consumer Commission (ACCC) gave the green light to a takeover proposed by legal technology company Dye & Durham Corporation (TSX: DND).
The ACCC said it came to its conclusion after accepting a court-enforceable undertaking from Dye & Durham that will see it divest its existing Australian business.
Let's check the details.
Link share price catches bid with ACCC tick
Way back in December 2021, Dye & Durham made its initial proposal to buy Link through a scheme of arrangement.
It originally offered $5.50 per share, however, came back with a revised offer of $4.30 per share more than seven months later.
Spurring the lower valuation was the ACCC's initial involvement in the proposed transaction and the downturn in equity markets this year.
Unsurprisingly, Link declined the offer. This led to another offer of $4.81 per share which Link shareholders eventually accepted with a 98% majority.
The ACCC initially voiced concerns due to Link's ownership of PEXA Group Ltd (ASX: PXA).
Link holds a 42.77% shareholding in PEXA, a company that operates an electronic lodgement network for digital conveyancing settlements. Both Link and Dye & Durham also operate in conveyancing via their exposure to data management and analytics.
"To accept [Dye & Durham's] D&D's proposed undertaking, we need to be satisfied that it will effectively address all competition concerns but is also structured in a way that can be relied upon to be workable and effective," the ACCC said at the time.
ACCC's seal of approval
Now, the competition watchdog has revised its stance after a court order that forces D&D to sell its existing Australian businesses to select buyers approved by ACCC.
"Without the divestment of D&D's Australian businesses, the proposed acquisition would have aligned PEXA, a near monopoly provider of Electronic Lodgment Network services, with D&D, a significant supplier of software to lawyers and conveyancers," the ACCC said today.
"Ultimately, the ACCC concluded that the proposed acquisition, taking into consideration the divestiture undertaking, would be unlikely to substantially lessen competition," it concluded.
Today's price action sees the Link share price down less than 1% over the past 12 months although it remains around 18% lower year to date.
