Funds administrator and share registry company Link Group says it has rejected a new proposal from Canadian suitor Dye & Durham to defer part of consideration until a settlement has been reached with regulators in the United Kingdom.
The revised offer has come about after the UK’s Financial Conduct Authority said last week it would only approve the $2.5 billion acquisition by Dye & Durham if £306 million ($518 million) was set aside to meet potential penalties and payouts relating to the role of Link’s UK unit, Link Fund Solutions’ (LFS), overseeing funds run by fallen financial wizard Neil Woodford.
At the weekend, Toronto-listed Dye & Durham, which in July had agreed to pay $4.81 per share to acquire the group, told Link it could not accept the conditions and cited the agreed terms that unconditional approval from the FCA was required.
That prompted a new offer, in which Dye & Durham would pay Link shareholders the equivalent of $3.81 per share in cash upfront, and would defer the remaining $1 for as long as two years to meet potential payouts relating to the Woodford funds.
The $1-per-share deferred amount is just over 20 per cent of the total consideration and equivalent to the $518 million figure cited by the FCA.
But early on Monday, Link told the Australian Securities Exchange its board was unable to recommend the new proposal after considering matters relating to “value, structure and alternatives available to Link Group”.
