Major superannuation fund administrator, Link Administration Holdings has allowed a private equity led consortium non-exclusive due diligence and signalled its preparedness to look at a demerger of its property settlements business, PEXA.
The company has been resistant to a takeover bid launched by Pacific Equity Partners earlier this month but announced to the Australian Securities Exchange (ASX) that it would be allowing the due diligence to occur.
PEP’s initial bid for Link was filed on 10 October with a revised non-binding indicative proposal filed on 26 October.
“The Link Group board has carefully considered the revised proposal, including obtaining advice from its financial, tax and legal advisors. Link Group has also consulted with a number of its shareholders and received feedback in relation to the revised proposal,” the company said.;
“The board notes the revised proposal is non-binding and indicative in nature, and subject to numerous conditions, including due diligence, approval from consortium investment committees and securing debt financing.
“The board considers that the revised proposal does not represent compelling value for Link Group shareholders on a control basis and further work is required to determine the viability and attractiveness of the separation of the PEXA and Link (ex PEXA) assets envisaged under the revised proposal,” the ASX announcement said.
“However, the board considers that it is appropriate to provide the consortium 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. The due diligence information will be provided subject to entry into an appropriate confidentiality agreement containing suitable protections for Link Group, including a standstill clause.
“There can be no certainty that such a proposal will eventuate and shareholders do not need to take any action in relation to the revised proposal and the board will update shareholders as appropriate.
“The board continues to examine the structural alternatives as disclosed in Link Group’s announcement dated 23 October 2020, including a separation and demerger of PEXA.”