Link Group board accepts $1.2bn takeover proposal from Mitsubishi UFJ

The super administrator business says the fallout of a failed takeover by Dye & Durham last year paved the way for Japan’s largest financial services group to make a bid.

Link has backed a $1.2bn takeover offer from Japanese financial services giant Mitsubishi UFJ Financial Group after a collapsed takeover bid by Canadian suitor Dye & Durham last year.

The share registry and superannuation administration provider signed a scheme implementation deed with the buyer’s subsidiary, MUFJ Trust and Banking Corporation, which is offering $2.10 a share for all holdings. It values Link equity at $1.2bn and implies an enterprise value of $2.1bn.

Link chairman Michael Carapiet indicated that major shareholders supported the planned sale of the business, after its shares rocketed 27.1 per cent to $2.16 on Monday.

Link spent 2023 streamlining its operations, including the sale of its banking and credit management business and its British arm Link Fund Solutions to Waystone.

This followed Canadian suitor Dye & Durham ending its long-running pursuit of Link in December 2022 following a number of problems, including fallout from the collapse of Woodford investment fund in 2019.

“To be honest, if we hadn’t done some of that simplification, we probably wouldn’t have a buyer of this quality who would have come looking,” Link chief executive Vivek Bhatia told The Australian.

“The simplification was very important for us because we wanted to make sure that the business is well understood, that it actually has the two key portfolios of our businesses that are well-performing market leaders in the jurisdictions they operate in and their core financial infrastructure.”

Mr Bhatia said Mitsubishi UFJ would be a great owner with very patient capital and a long-term investment horizon for a digital infrastructure business like Link.

“It is very important to have somebody who has a long-term horizon in terms of investment profile, in terms of how they look at the business and what they focus on from a growth ­trajectory.”

The board of Link has unanimously recommended that shareholders vote in favour of the scheme in the absence of a superior and subject to the independent expert concluding that it is in their best interests.

If the scheme is approved, Link shareholders will also receive a special dividend of 16c per share.

Mr Carapiet said the offer from Mitsubishi UFJ was very significant and urged shareholders to approve the deal, arguing it was in the best interests of the group’s clients and staff. “However you want to look at it, this is a significant premium. So in terms of dollars and cents, it’s something that (shareholders) need to take very seriously,” he said.

“It allows Link to be owned by a major international organisation who has growth ambitions and who wants to back this business. I think that is overwhelmingly good for our clients and our staff as well. So shareholders get the value, but on a really long-term basis. Staff and clients will be significantly advantaged.”

Mitsubishi UFJ is Japan’s largest financial group and one of the world’s largest bank holding companies. It owns 22 per cent of Morgan Stanley and has a number of assets in Australia, including First Sentier Investors — previously the global wealth management arm of Commonwealth Bank.

It said the takeover would allow it to further accelerate its global business expansion via access to Australian funds and global corporate clients.

“This acquisition of global pension and stock administration functions will enable MUFG to further accelerate its global business expansion via access to Australian funds and global corporate clients, facilitating the Global IS Business in offering a broad range of solutions, allowing it to strengthen its global reach, develop growth opportunities, and expand its business scale,” Mitsubishi UFJ said.

The share purchase is expected to take place from June 2024.