A rude start to 2021 for shareholders in Link Administration Holdings as immediate hopes for a takeover auction disappeared.
The company told the ASX yesterday that a $3 billion indicative offer from US group, SS&C Technology Holdings is no longer on the table.
The news saw the shares lose 10% of their value at the opening after the statement was made pre-market, and they continued lower during the session to end at $4.80, down more than 13% for the day.
Link’s shares jumped by more than 13% on December 8 after the Nasdaq-listed firm made an indicative offer to buy 100% of the company’s shares for $5.65 per share
The offer from the US financial services firm topped an offer from two private equity firms – Pacific Equity Partners (PEP) of Australia and The Carlyle Group of the US – which had been rejected by Link six weeks earlier.
This saw offer was subject to the US group receiving confirmatory due diligence, debt financing on acceptable terms, the negotiation and execution of transaction documentation, and necessary corporate and regulatory approvals.
While the Link board said it did not believe the proposal represented compelling value for shareholders, it considered it appropriate to provide SS&C Technology with due diligence information on a non-exclusive basis. This would allow it to develop a proposal that may be capable of being recommended to shareholders.
But on the first day of trading for 2021 a letter to the ASX from Link revealed it had received a letter from SS&C Technology dated January 3 saying it had withdrawn its proposal.
No reason was given for the withdrawal, so no counter offer.
The Link board said in its letter to the ASX that it will continue to consider all alternatives to maximise value for shareholders.
“As previously announced, this includes a potential separation by way of demerger of Link Group’s interest in Torrens Group Holdings (TGH) (and its core asset, PEXA).”
Link Group said it will also explore a trade sale of its interest in TGH from January 18, 2021.
