- Maintains up to
A$4.81 per share consideration - Offers greater value more quickly and with certainty of execution compared to other options available to Link Group shareholders
The revised proposal maintains consideration of up to
"Our revised proposal ensures Link Group shareholders receive the same economic value as our earlier offer, while taking into account the impact of the potential
The
Under
- It delivers a premium to the current share price and certainty of an outcome. Link has been "in play" for an extended timeframe, with multiple parties conducting due diligence and assessing the potential value of the company, with no other alternatives having surfaced which delivers the value and certainty of closing versus
Dye & Durham's proposal. - The prior proposal at
A$4.81 per share was recommended by Link Group's Board of Directors and overwhelmingly voted in favour by Link's shareholders –Dye & Durham's new proposal maintains the possibility of providingA$4.81 to Link's shareholders and, appropriately, adjusts dollar for dollar to the extent restitution and/or redress payments are levied on LFS. If Link Group is in fact found liable by theFCA for restitution or redress payments related to theWoodford Fund , Link Group shareholders are no worse off, as the liability is an existing one that impacts every Link Group shareholder. - The fair value for Link, published in the Supplementary Explanatory Booklet and calculated by the independent expert, resulted in a range of
A$4.34 -A$5.51 , before adjusting for any potential redress payment – where £306 million equates to an approximateA$1.00 per share loss.Dye & Durham's new proposal deliversA$3.81 on closing, up toA$1.00 depending on a final and binding conclusion from theFCA and up to an additionalA$0.13 from the proceeds from any sale of Link Group's Banking and Credit Management Business. Dye & Durham believes Link Group will achieve more value for its shareholders by accepting its revised proposal versus a "status quo" or other breakup strategies, which carry significant execution risk over a long period of time and where asset values are offset by tax leakage, stranded shared services costs, outstanding debt and likely restrictions imposed by theFCA . A potential "break-up" scenario value, if one can be executed, is illustrated in the following table:
In A$ Millions | A$ Per Share | |||||||
Source | Low | High | Low | High | ||||
RSS | Experts Report Valuation | |||||||
CM - Regulated by | Experts Report Valuation | |||||||
FS - Regulated by | Experts Report Valuation | |||||||
BCM - Regulated by | Experts Report Valuation | |||||||
Corporate | Experts Report Valuation | ( | ( | ( | ( | |||
Core Business EV | ||||||||
Interest in Pexa | Current Market Value | |||||||
Other Assets / (Liabilities) | Experts Report | |||||||
Experts Report | ( | ( | ( | ( | ||||
Less: FCA Redress (£306MM) | FCA Notice | ( | ( | ( | ( | |||
Equity Value | ||||||||
Less: Minority Interests | Experts Report | ( | ( | ( | ( | |||
Equity Value - Link Interest Standalone | ||||||||
Less: Breakup Tax Leakage | Footnote 1 | ( | ( | ( | ( | |||
Equity Value - Link Interest Breakup | ||||||||
Dye & Durham Proposal | ||||||||
Upfront Consideration | ||||||||
Plus: BCM Deferred Consideration | ||||||||
Total (Pre-FCA Contingent Consideration) | ||||||||
Premium to Breakup Value | 59 % | 22 % | 59 % | 22 % |
Note: Experts Report Valuation based on the Independent Expert Report as published by Link in the Supplementary Explanatory Booklet. |
1. Assumes 30% tax paid on the RSS and CM high and low asset valuations less their estimated cost base. |
- The
FCA regulates not only LFS but also Link Group's Corporate Markets and Banking and Credit Management businesses. Given this,Dye & Durham believes that Link Group would have difficulty distributing any sale proceeds from any of its businesses to Link Group shareholders until after the Woodford liability is addressed.
The revised proposal is subject to the negotiation of satisfactory documentation between the Company and Link Group and subject to agreement from
About
Additional information can be found at www.dyedurham.com
Forward-looking Statements
This press release may contain forward-looking information within the meaning of applicable securities laws, which reflects the Company's current expectations regarding future events, including statements relating to the Company's planned acquisition of Link Group, the amendment of terms thereof, the approvals of such amended terms and the closing of the planned acquisition. In some cases, but not necessarily in all cases, forward-looking statements can be identified by the use of forward looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "is positioned", "estimates", "intends", "assumes", "anticipates" or "does not anticipate" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "will" or "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking statements. Forward-looking statements are not historical facts, nor guarantees or assurances of future performance but instead represent management's current beliefs, expectations, estimates and projections regarding future events and operating performance.
Such forward-looking information is necessarily based on a number of opinions, estimates and assumptions. Forward-looking information is also subject to a number of risks and uncertainties, many of which are beyond the Company's control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the risk associated with the Company's and Link Group's ability to obtain the approvals that are required to amend the terms of the proposed acquisition and consummate itand the timing of the closing of the proposed transaction, including the risk that amended terms are not approved, the conditions to the transaction are not satisfied on a timely basis or at all and the failure of the transaction to close for any other reason; the risk that a consent or authorization that may be required for the proposed amendment and the transaction itself is not obtained or is obtained subject to conditions that are not anticipated; the outcome of any legal proceedings that may be instituted against the parties and others related to the acquisition agreement; unanticipated difficulties or expenditures relating to the transaction, the response of business partners and retention as a result of the announcement and pendency of the proposed amendment or the transaction itself; the Company being unable to realize expected synergies; and the diversion of management time on transaction-related issues, as well as the factors discussed under "Risk Factors" in the Company's most recent annual information form. If any of these risks or uncertainties materialize, or if the opinions, estimates or assumptions underlying the forward-looking information prove incorrect, actual results or future events might vary materially from those anticipated in the forward-looking information. Accordingly, investors should not place undue reliance on forward-looking information, which speaks only as of the date made. The forward-looking information contained in this news release represents the Company's expectations as of the date of this news release, and are subject to change after such date. The Company disclaims any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as expressly required under applicable law.
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