The stellar sharemarket debut of intelligence software company Nuix on Friday could have implications for the future of takeover target Link Administration Holdings.
The Nuix stock price closed at $8.01 after listing at $5.31 on debut and was up as much as 60 per cent during the session, hitting $9.
Some say on the back of this roaring success it could be a compelling reason for Link shareholders to retain their shares in electronics settlements business Property Exchange Australia (PEXA), of which Link owns 44 per cent.
Like Nuix, PEXA, which is Australia’s first and only full-service electronic lodgement network operator, can be considered a technology stock, and Link has outlined plans to demerge the business to realise its full potential.
This is at a time when such companies are richly priced and highly sought after, partly due to the COVID-19 pandemic.
In an offer for Link by The Carlyle Group and Pacific Equity Partners, shareholders had the option of selling the buyout funds their interest in Link while retaining their stake in PEXA.
Under this offer, shareholders would get $3.80 per share, but including the 44 per cent PEXA interest they would get $5.40 a share, valuing the entire company at about $2.9bn.
Link’s board rejected the private equity firms’ earlier bid of $5.40 a share, but allowed them to carry out due diligence to determine if they could come up with a higher bid. Both Carlyle and PEP are expecting to conclude due diligence within the next fortnight.
The talk in the market is that the firms are likely to emerge with an offer of at least $5.40 a share, with all said to be going well in the data room. Already, shareholders holding about 17 per cent of the stock have indicated they are eager for an offer at that level to be accepted.
Some suspect the private equity firms will put forward an offer of $5.40 a share before returning to the negotiating table and lifting the offer slightly.
Link’s update expected market update this week is likely to attract plenty of attention.
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