Link Administration has changed its plan to sell down its stake in electronic conveyancing platform PEXA as the initial public offering of PEXA has been cancelled and the trade sale offer has since been achieved.
In today’s update on the trade sale of Property Exchange Australia Limited (PEXA), Link Group announced that the offer to acquire PEXA made by a consortium has now been accepted by shareholdings representing greater than 82% of PEXA’s issued capital which was earlier accepted by just 50% and above shareholdings of PEXA’s issued capital as per the previous release dated 6 November 2018.
Advised by J.P.Morgan, the consortium consists of Link Group, Commonwealth Bank of Australia and Morgan Stanley Infrastructure Inc. As per the updated trade sale offer, the consortium will pay an enterprise value of $1.604 billion.
It has been stated that remaining shareholders of around 18% of PEXA’s issued capital will be dragged by the Consortium pursuant to PEXA shareholders’ agreement and can elect to receive cash consideration or scrip in the Consortium’s acquisition vehicle.
On the front of Link Group’s shareholding in PEXA, the statement read that Link’s Group interest will increase from its current shareholding of 19.8% to between 35.1% and 44.2% subject to remaining shareholders’ cash/scrip elections.
Link Group Managing Director John McMurtrie stated that “alongside its consortium partners Link Group is pleased to successfully acquire PEXA. Alan Cameron, Marcus Price and the PEXA team have done an exceptional job of developing and delivering on the vision of an electronic conveyancing system for Australia.”
In fiscal year 2018, LNK’s Board has declared a fully franked final dividend of 13.5 cents per share, in addition to the interim dividend of 7 cents per share. The dividend declared during FY18 represents the upper end of company’s dividend policy, i.e. 40% to 60% of NPATA, backed by the strong financial results achieved during the year.
The revenue of the group has increased by 54% to $1,198.4 million for the year ended 30 June 2018, delivering higher EBIT of $335.3 million that is up by 53% from previous corresponding period. Further, the statutory NPAT of the company increased by 68% to $143.2 million ahead of acquiring Capita Asset Services for $1,548 million during FY18. Later it was named as Link Asset Services, or LAS.
As per the latest update, the trade sale offers to acquire PEXA is expected to be completed within next two to three months subject to satisfaction of certain prior conditions.
Following the news of greater acceptance of trade sale offer by PEXA’s shareholders, Link Administration shares edged up by 0.581% to trade at $7.785 on 12 November 2018. Moreover, the stock of Link Administration Holdings Limited (ASX: LNK) has seen a performance change of -11.64% over the past one year. LNK’s PE multiple is 27.100 x with market capitalization of $4.1 billion as on 12 November 2018.
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