Link Group has rejected a third takeover offer for its business in less than two months, telling the market the latest offer from US financial services group, SS&C Technologies Holdings did not represent compelling value for shareholders.
But as with previous offers from private equity companies, Link has left the door open for higher offers.
The superannuation fund administrator received two offers from private equity groups, Pacific Equity of Australia (PEP) and Carlyle of the US that valued the company around $2.9 billion.
This week’s offer from the US company pushed valuation up to $3.6 billion.
(And we have to remember these are not firm bids, just what the trade calls – non-binding, indicative offers’ (AKA tyre kicking).
SS&C’s offer suggested a price of $5.65 a Link share, which just topped the private equity consortium’s second offer of $5.40 a share, or $3.80 per share excluding property settlements platform PEXA.
Both offers came in way below the $6.37 a share PEP floated the company for on the sharemarket in 2015, so the float hasn’t been a stunning success for those investors who listened to PEP’s blandishments five years ago.
Link told shareholders on Thursday it would give both groups access to the company’s books and records to conduct due diligence, leaving the door open for better offers.
“The Link Group board considers that the SS&C proposal does not represent compelling value for Link Group shareholders on a control basis,” it said.
“However, the board considers that it is appropriate to provide SS&C with due diligence information on a non-exclusive basis so that it can develop a proposal that may be capable of being recommended to shareholders.”
Link again pointed out that both suitors had put forward indicative, non-binding proposals and no deal was certain.
Link provides administration services for major superannuation funds and was hit by increasing regulation of the sector this year, including the Australian Tax Office’s policy to close inactive super accounts and the federal government’s early access to the superannuation scheme.
Link also controls PEXA, an online property exchange (for settlements), which is seen as one of Australia’s most promising technology companies.
Grabbing PEXA and shunting off the rest of Link seems to be the main idea of the bidding so far, despite what the various parties might say.
Link shares ended at $5.61, up 0.9% on a day when the wider market fell.
