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#Risks
stale
Added 6 months ago

Maybe not relevant from an investment perspective but more of a rant.

I do want to mention one of my dividend payments got withheld after buying a stock one month before the reporting ann because there were no bank details recorded.

The real kicker is that I had put the payment details against the stock one month before the dividend/report announcement and when Link sent me a reminder as soon as the holding got updated.

Called Link again and they told me that I will get the payment but will wait another month.

I guess withholding payments is one way to add a little bit to the dwindling top line number in the form of interest earned or deferred AP?

Either way, pretty poorly handled as it is a decent divi amount.

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Valuation of $3.00
stale
Added one year ago

Revised to show possible value after in specie transfer of PEXA stake to shareholders (1 PXA/7 LNK)

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#In-Specie Distribution
stale
Added one year ago

LNK disconnected down 40%

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The good news for shareholders is that Link has decided that it will distribute at least 80% of its remaining shares in PEXA to Link shareholders via an in-specie distribution.

Link intends to seek shareholder approval for the plan in December, with the distribution then to occur in January if given the thumbs up.

Oh, that is why the price is down today

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#ASX Announcement 21/1/21
stale
Added 3 years ago

Link Group half year 2021 update – preliminary result above guidance

The key reasons for the outperformance against the trading update provided on 9 December 2020 are:

? positive revenue momentum across the business during December 2020 generating an Operating EBIT of $2 million above guidance;

? PEXA5 performance during December 2020, delivering another record month of transaction volumes on the PEXA Exchange, and contributing to $3 million outperformance in Link Group’s Operating NPATA guidance. PEXA 1H FY2021 revenue and Operating EBITDA were $104 million and $51 million, respectively; and

? a lower than anticipated effective tax rate, driven by a larger than forecasted use of unrecognised tax losses. In this half year period, the lower effective tax rate has had a positive impact on Operating NPATA of $3 million. Our expectations for the effective tax rate for the year ended 30 June 2021 are revised to 27 – 28%.

View Attachment

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#Takeover Offer for LNK
stale
Last edited 3 years ago

12-Oct-2020:  Non-binding indicative proposal to acquire Link Group from Private Equity consortium:

Link Administration Holdings Limited (ASX: LNK) (Link Group) has received a conditional, nonbinding indicative proposal from a consortium comprising Pacific Equity Partners, Carlyle Group and their affiliates (Consortium) to acquire 100% of the shares in Link Group by way of a Scheme of Arrangement (Proposal).

The indicative cash price offered to shareholders under the Proposal is $5.20 per share. The offer price assumes no further dividends, distributions or reductions in capital would be paid from the date of the Proposal. The Proposal also includes a reference to potential scrip alternatives.

The Proposal is subject to a number of conditions, including:

  • due diligence;
  • negotiation and execution of transaction documentation;
  • securing debt financing;
  • final investment committee approval from the relevant Consortium committees; and
  • certain regulatory and other approvals, including the Foreign Investment Review Board.

Perpetual, which currently holds 9.65% of Link Group, has sent a letter to the Consortium, stating that it intends to vote any shares held at the time of any meeting in favour of the Consortium acquiring 100% of Link Group at a share price of no less than $5.20, should one proceed. This statement is subject to the absence of a superior proposal and Perpetual continuing to hold its shares on the date of any meeting. It is also subject to Perpetual continuing to consider the Proposal to be in the best interests of its members. The support is also stated to cease to have effect in 6 months' time, or earlier, if the Proposal is not pursued.

The Link Group Board will consider the Proposal, including obtaining advice from its financial and legal advisers.

Shareholders do not need to take any action in relation to the Proposal. It should be noted that there is no certainty that the discussions with the Consortium will result in any transaction.

Link Group has appointed Macquarie Capital and UBS as its financial advisers and Herbert Smith Freehills as its legal adviser.

If there are material developments in the future, Link Group will inform shareholders as required under its continuous disclosure obligations.

--- ends ---

LNK rose +25% or $1/share today from $3.99 (Friday's close) to $4.99 (today's close) due to this PE (Private Equity) offer today - which is pitched at $5.20/share.  As noted above, there are a number of conditions to satisfy, and there is no guarantee that a final binding offer will be made at all, or recommended by the LNK board if there is a binding offer made.  I don't think financing is going to be a problem for Pacific Equity Partners or Carlyle Group - however the DD (due diligence) might turn up one or two things that could be deal-breakers.  PE are like vultures.  They look to either break up and sell off parts of businesses and their assets for a total of more than they paid for the business, or to turn the business around and then re-float it (IPO it again on the ASX) and exit at a tidy profit.  They are not looking to be long-term owners and managers of these businesses - they are looking to make plenty of money within 2 to 5 years, and move on.  Just as Anchorage Capital did with Dick Smith when they bought it off Woolworths in November 2012 with just $10m to $20m of their own money, and sold it for $520 million in 2014 - after just 2 years.  See here:  https://foragerfunds.com/news/dick-smith-is-the-greatest-private-equity-heist-of-all-time/

Ever since then, I've been VERY wary of buying into IPOs or buying shares in recently IPO'd companies when PE have been involved.  Dick Smith Holdings didn't look too bad during the first year or so, after Anchorage re-floated the company, and then the house-of-cards collapsed, and shareholders lost everything.  They got $0 for their shares.  I was not a shareholder thankfully, but I've managed to lose plenty on other companies over the years.  I also managed to buy a couple of very cheap Dick Smith TVs and other gear online before Dick Smith Holdings collapsed.  The prices were really incredible.  I wondered how they made any money.  Turns out they didn't make any money, which is why they collapsed with debt they couldn't repay.  Anchorage Capital however made a cool half a billion on that deal.

Which is all to say that Private Equity (PE) are vultures, and they are in it to make a relatively quick profit.  Think Gordon Gecko in the 1987 movie "Wall Street".   That could be good for LNK shareholders who might be able to exit LNK at $5.20 soon-ish, but it's unlikely to be so rosy when Pacific Equity Partners and Carlyle Group put some lipstick on this pig and IPO it again in a year or two.  That will be one stock I will most definitely avoid - if and when it happens.

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