The market propensity to believe rumours and abandon rational thought help explain the highly volatile share price performance of the country’s biggest superannuation fund administrator, Link.
When the share price of takeover target Link Administration closed on Friday at $4.41, the company was valued about 20 per cent less than the $2.9 billion bid from Canadian company Dye & Durham.
It is not unusual for a company under takeover offer to trade on a discount of 5 per cent to 10 per cent to the offer price. A 20 per cent discount is not only rare, it is irrational.
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Tony Boyd is the former Chanticleer columnist. He has more than 35 years' experience as a finance journalist. Connect with Tony on Twitter. Email Tony at tony.boyd@afr.com
