Link Administration (ASX:LNK) trades strong on an acquisition proposal

Highlights

  • Link Administration receives a proposal from a syndicate led by Pepper European Servicing Limited concerning the acquisition of Link Group’s Banking and Credit Management (BCM) business.
  • Syndicate proposes to acquire BCM for approximately AU$86.5 million.
  • The proposal comes at a time when Pension industry is booming in Australia.

ASX listed Australia-based firm, which provides services to the superannuation administration industry, Link Administration Holdings Limited (ASX:LNK) announced on Friday that it has received a conditional, nonbinding indicative proposal from a syndicate. This syndicate is headed by Pepper European Servicing Limited. The proposal is related to the acquisition of the whole of Link Group’s Banking and Credit Management (BCM) business.

According to the announcement, syndicate has proposed to acquire BCM for approximately AU$86.5 million.

The Company today informed that the said Proposal is subject to a number of conditions, including:

  • due diligence;
  • obtaining anti-trust approvals;
  • obtaining regulatory change of change approvals;
  • negotiation and execution of transaction documentation; and
  • securing debt financing.

This announcement took the share price up by 3.687% to trade at AU$4.780 per share at 2:00 PM AEDT.

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Last week, LNK had revealed that it has received an AU$2.8 billion takeover offer from the Carlyle Group. Carlyle’s takeover proposal valued LNK’s shares at AU$3 each and a distribution of Link’s shareholding in Pexa Group to shareholders valued at AU$2.38.

The Company has informed that it will consider the Proposal, including obtaining advice from its financial, legal and tax advisers. The Company’s shareholders do not need to take any action in relation to the Proposal.

The announcement although stated that there is no certainty that the discussions with the syndicate will result in any transaction.

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Bottom Line:

The proposal comes at a time when the Company’s client base, including several pension funds, continues to accelerate in size and elegance. Australia’s prudential regulator estimates that the country’s pension pool will almost double to AU$5 trillion by 2034 as employers make a contribution equivalent to 9.5% of a worker’s wage into a retirement fund per month.

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