ACCC to probe Link move on Pillar

Link is pursuing state-owned funds administrator Pillar, in a move that’s sparked a competition investigation.

Link Group chief executive John McMurtrie. Pic: John Feder

Link Group has confirmed it is pursuing the state-owned funds administrator, Pillar Administration, in a move that has sparked an investigation by the competition watchdog.

Link (LNK), a share registry and superannuation funds administrator that debuted on the stock exchange late last year, has long been regarded as a top contender for Pillar.

But the company had stopped short of officially confirming its interest.

Its statement to the ASX this morning will be followed by the launch of ACCC’s investigation into the deal as it calls for market submissions.

Pillar is one of Australia’s leading superannuation administration providers but it suffers from a high cost base and slender earnings.

Over past several years New South Wales’s government has deliberated over how to cast off the business and in 2013 asked Deutsche to assess the exit options.

Link is competing with several other suitors, including top contender, Mercer, for the business, which is expected to fetch close to $100m.

Given that 14 of the top 20 superannuation funds run their administration services in-house, Link is expected to argue its acquisition of Pillar does not pose a threat to competition in the

sector.

In its prospectus Link stated that it services close to a third of the superannuation funds administration market.

The group’s declaration of its pursuit of the state-owned business, which is being handled by KPMG, comes as the market braces for a possible selldown of Pacific Equity Partners’ residual 25percent holding.

Any trade will occur after the results next week.

But as The Australian reported recently, Link is also in the race for the $US800m Tricor Holdings, the back office division of Hong Kong lender, Bank of East Asia.

If the group advances to the next phase, PEP’s exit, which is being navigated by UBS, may be delayed.

Two PEP executives, Paul McCullagh and Cameron Blanks, remain as non-executive directors at Link.