Dye & Durham is understood to be still finalising the financing terms for its proposal to buy Link’s corporate markets and banking & credit management businesses for $1.27bn.
The delay means that Link, an Australian superannuation fund manager, is unlikely to have an agreed deal to announce when it holds its annual general meeting in Sydney.
Sources say Dye & Durham is trying to get better financing terms.
Clarification of how much it will need to pay British regulators, which had asked that $519m be set aside for its role in the so-called Woodford saga, is not far away.
Dye & Durham last month offered to buy Link’s corporate markets business and parts of the BCM business for $1.27bn.
Earlier, Dye & Durham proposed to buy all of Link – initially for $2.9bn – but cut the price from $5.50 per share or $2.9bn to $4.81 and then to $3.81, as it was forced to give an undertaking to the Australian competition watchdog to sell assets and then later faced the prospect of financial penalties from the British regulator. This caused the deal to collapse when the $3.81 per share offer was rejected.
Link said at the time that it had engaged with Dye and Durham on a non-exclusive basis to determine whether a deal could be progressed.
While the pending deal is unfolding in the background, on Monday Link said it had completed the sale of a 10 per cent stake in Property Exchange Australia for $101.9m, reducing its stake to 32.77 per cent, which means it does not have to raise capital to pay down debt.
The selldown was at $13.50 per PEXA share. Settlement is expected on November 23.
Expectations had been mounting that Link might have to raise capital, but sources believe that the latest move to sell down the PEXA stake removes that risk.
Earlier, some had been sceptical about whether the Canadian buyer could fund an acquisition of Link, with its market value on the Toronto exchange now at close to $C1bn ($1.1bn), about a third of its value at the start of the year.
Link is also planning to give back the stake it owns in PEXA to shareholders via an in specie distribution at the start of next year.
Link’s role in the Woodford saga was as authorised corporate director, or trustee, of the fund run by former star stockpicker Neil Woodford, who was known at the time as Britain’s Warren Buffett.
The fund was deluged with redemption requests in mid-2019 as investors panicked after allegations emerged that the fund manager was taking excessive risks with investments. Redemptions were suspended and funds frozen.
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