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Link ‘unable to recommend’ revised takeover offer after regulatory roadblock

Dye & Durham has again revised its offer for Link after the UK’s financial regulator placed conditions on the takeover.

user iconJon Bragg 19 September 2022 Big Law
Link ‘unable to recommend’ revised takeover offer after regulatory roadblock
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Editor’s note: This story originally appeared on Lawyers Weekly’s sister brand, Investor Daily.

The board of Link Group will not recommend a revised takeover offer put forward by Dye & Durham (D&D) in light of conditions imposed by the UK Financial Conduct Authority (FCA).

Last week, the regulator said it would approve the takeover if D&D agreed to cover up to £306 million ($520 million) in potential redress payments, which Link’s UK subsidiary Link Fund Solutions could be required to pay due to its role in the collapse of the LF Woodford Equity Income Fund.


In a letter received by Link on Sunday (18 September), Dye & Durham indicated that it would likely be unable to accept the FCA’s conditions.

The Canadian firm has developed a revised proposal, which includes an upfront cash payment of $3.81 per share compared to its earlier offer of $4.81 per share.

Under the revised bid, a contingent payment of $1.00 per share will be payable if, within 24 months of the implementation of the scheme, the FCA finds that Link Fund Solutions is not liable for redress payments in relation to the Woodford fund.

A percentage of the contingent payment will also be payable if Link Fund Solutions is found to be liable for redress but to an amount less than £306 million.

Link acknowledged the revised proposal from D&D in a statement to the ASX on Monday (19 September).

Having considered a “range of factors” in relation to the new proposal, the firm said that “the Link Group board is unable to recommend the new proposal”.

However, Dye & Durham chief executive Matthew Proud is confident that the company’s revised bid ensures Link Group shareholders receive the same economic value.

“Based on our due diligence, we firmly believe that consummating this transaction under the existing scheme implementation deed will create more value with greater speed and certainty of execution than any alternative,” Mr Proud said.

D&D confirmed it is ready to implement the revised proposal on an expedited basis within the current scheme implementation deed, subject to the approval of Link, Link’s shareholders and the court, and suggested that completion could occur by the end of the year.