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Dye & Durham lowers takeover bid for Link

Due to competition concerns and the current state of financial markets, Canada’s Dye & Durham has now proposed a lower offer price for Link Administration Holdings (ASX: LNK).

user iconJon Bragg 29 June 2022 SME Law
Dye & Durham
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Editor’s note: This story was originally published on Lawyers Weekly’s sister brand, Investor Daily.

Dye & Durham has reduced its takeover offer for Link Administration to $4.30 per share, a fall of almost 22 per cent from the original offer price of $5.50 announced in December last year.

Link said on Monday (27 June) that it had received a letter from Dye & Durham that stated the Canadian firm was considering providing an undertaking to the Australian Competition and Consumer Commission (ACCC) in order to obtain its approval after the regulator raised “significant preliminary competition concerns” about the acquisition.


In the letter, Dye & Durham proposed the reduction to the offer price under the scheme implementation deed due to this potential undertaking as well as “the current state of the financial markets and values of both the Link Group and the PEXA shares”.

“Other than a reduction in the offer price, Dye & Durham is not prepared to make any further amendments or alterations to the scheme implementation deed and expects that the ACCC approval, based on the contemplated undertaking, will satisfy one of the key outstanding conditions in the scheme implementation deed,” Link said in an ASX announcement.

After rising above the $5.50 offer price when the proposed takeover was originally unveiled in December, Link’s share price has since dropped to below $4, closing at $3.84 on Monday.

“The Link Group board will consider Dye & Durham’s request, including obtaining advice from its financial, legal and tax advisers, and will provide Link Group shareholders with an update during the next week,” the company said.

This will include any updates to the scheme timetable as well as any changes to the scheme meeting and special general meeting that are scheduled to occur on 13 July.

Meanwhile, PEXA traded above $20 at the start of the year but on Monday closed at $13.67.

Earlier this month, the ACCC explained that its competition concerns related to Link’s 42.77 per cent shareholding in PEXA, which Dye & Durham would gain if the takeover proceeds.

Dye & Durham (D&D) currently provides information broking services, conveyancing and legal practice management software, and manual property settlement services in Australia, while PEXA facilitates digital conveyancing settlements through its electronic lodgment network.

“It is the potential vertical integration of D&D’s operations and PEXA that gives rise to the competition concerns,” the ACCC said in a statement of issues.

“The proposed acquisition would align PEXA, a near monopoly provider of electronic lodgment network services, with D&D, a significant supplier of software to lawyers and conveyancers, significantly increasing vertical integration in this industry.”