Link Group to focus on sale of stake in online property exchange network PEXA
Link Group walks away from $322m acquisition of Pepper’s European loan servicing business, after a year-long deadline passed.
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Link Group has walked away from its $322m acquisition of Pepper’s European loan servicing business, after a year-long deadline passed with the deal still not completed.
In an update to the market on Monday, Link also told shareholders that the trade sale process of its 44 per cent stake in online property exchange network PEXA was underway, “with good indicative interest received to date”.
ASX-listed Link, which was just weeks ago fielding takeover offers from two suitors, said it would prioritise the trade sale process over a demerger of its investment in PEXA.
The board was committed to maximising the value of its interest in PEXA for shareholders, Link chief executive Vivek Bhatia said.
“PEXA’s cash balance continues to strengthen month-on-month, highlighting the strong cashflow conversion of this investment,” he said.
The property transaction business had a strong first half as it benefited from the shift to online settlement through the coronavirus pandemic.
It delivered a record month of transaction volumes on the PEXA Exchange in December, while its operating pre-tax earnings for the first half of 2021, at $51m, were just shy of the $58m it reported for the 2020 full year, Link said last month.
Link closed out the December half with two takeover offers on the table: the first from private equity firms Pacific Equity Partners and The Carlyle Group, and the second from US-listed SS&C Technologies. But the prospect of a bidding war was short-lived, with SS&C walking away in early January.
The collapse of the $3bn-plus bid came after Link opened its books to the Nasdaq-listed bidder.
Investors punished Link’s shares after SS&C pulled its bid, with the share price dropping 15 per cent on the news. The shares have recouped some of the losses but are still well down on the $5.55 they were trading at in December.
Mr Bhatia on Monday said the company was focused on simplifying the business, delivering its global transformation program and maintaining a strong balance sheet.
“As a result of the termination of the Pepper European Servicing transaction, we will preserve the capital for future growth opportunities,” he said.
Link shares ended the session up 1.67 per cent at $4.86.
Originally published as Link Group to focus on sale of stake in online property exchange network PEXA
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