Link backs revised takeover bid from Dye & Durham

Link Administration Holdings Limited (Link) — which holds a 42.7 per cent stake in e-conveyancing company PEXA Group — has announced that it has agreed to an amended Scheme Implementation Deed for its sale to Dye & Durham Corporation (D&D).

International firm D&D, which provides conveyancing, manual property settlement services, legal practice management software and information broking services, had originally entered into a Scheme Implementation Deed with Link in December 2021, for a Base Scheme Consideration of $5.50 per share.

It had hoped that the takeover would have concluded by July 2022, pending regulatory approvals. However, the Australian Competition and Consumer Commission (ACCC) declared concerns around the deal.

Given that Link currently holds a 42.7 per cent stake in PEXA Group, which operates an electronic lodgement network that facilitates digital conveyancing settlements and currently dominates the Australian e-conveyancing market, the ACCC said the sale would align PEXA, a “near monopoly provider of electronic lodgement network services”. As D&D is itself a significant supplier of software to lawyers and conveyancers, it also was concerned about significant increases to vertical integration in the industry.

Following the ACCC announcement, D&D reduced its takeover offer for Link to $4.30 per share in June (which was rejected), and upped it again to $4.57 per share earlier this month, which was again rejected.

After Link’s board continued discussions with D&D about the deal, it has now been announced that the two companies have agreed to a revision of the Base Scheme Consideration, so that it is $4.81 per share.

In addition, Link shareholders would also be entitled to receive up to $0.13 per share if D&D reaches an agreement to sell Link’s banking and credit management (BCM) business.

In a statement to the ASX on Thursday, Link said: “The Link Group board unanimously recommends that Link Group Shareholders vote in favour of the revised scheme in absence of a superior proposal and subject to the independent expert concluding and continuing to conclude that the revised scheme is fair and reasonable, and in the best interests of Link Group shareholders,” the firm said.

Link said that all of its directors intend to vote in favour of the revised scheme at the scheme meeting, which is now due to occur in mid-August after previously being postponed.

“Under the revised scheme, Dye & Durham remains obligated to use its best endeavours to pursue the sale of the BCM business for a period that continues to 12 months after the implementation of the revised scheme,” Link's statement continued.

“Link Group notes that it has been advised by Dye & Durham that it will shortly appoint financial advisers to sell Link Group’s BCM business and will commence this process immediately following implementation of the revised scheme.”

The Revised Scheme remains conditional on receipt of court approval, regulatory approvals (including ACCC approval and UK Financial Conduct Authority approval), and other customary conditions.

[Related: Link board ‘unable to recommend’ revised takeover bid]