Link Administration Holdings Share Price up on Buyout Offer (ASX:LNK)

At the time of writing, the LNK share price traded at $5.66 up 14.11%.

Link Administration Holdings Ltd [ASX:LNK] received a non-binding proposal to acquire 100% of its shares.

Link Administration Holdings Share Price Chart

Source: Optuma

The offer on the table for Link Administration

The company provide administration outsourced solutions for superannuation funds and corporate markets.

With a market cap of $2.65 billion, LNK operate across 12 countries.

Link Administration recently announced it received a conditional, non-binding indicative proposal from SS&C Technology Holdings (SS&C) to acquire 100% of the shares in Link Group by way of a scheme of arrangement.

The offer in cash is proposed at $5.65 per share.

SS&C Technology is the world’s largest hedge fund and private equity administrator, holding a market cap of US$18.64 billion and trade on the NASDAQ.

It is easy to see why the buyout offer is on the table as both companies operate in similar areas of the fintech space.

It was only in October this year the company rejected a $2.8 billion takeover offer.

In the current climate many feel that Link Administration is currently undervalued.

Where will all this push the LNK share price?

The $5.65 per share offer from SS&C is 4.6% higher than the $5.40 per share offer made previously by private equity firms Carlyle Group and Pacific Equity Partners.

This pushed the share price up to where it trades at the time of writing:

ASX LNK Share Price Chart 2

Source: Optuma

From the high at the end of January the share price fell over 62% — so it’s easy to see why it’s considered undervalued.

From the low the share price recovered and the offers started coming in for buyouts.

Should the price move higher, than the level of $6.06 may become the focus.

On the downside, if price starts to retrace then the levels of $5.42 and $4.50 may provide future support.

Link Administration appears to have a few well-funded suitors right now.

Although higher valuations from other parties make the company look good, they still must agree on a price, if they sell at all.

The September dividend payment sat at $0.035 with 50% franking.

With this being a bit low compared to other stocks out there and a potential buyout jumping the share price around, this may be one to stay away from for the time being.

Our publication Money Morning is a fantastic place to start on your investment journey. We talk about the big trends driving the most innovative stocks on the ASX. Learn all about it here.


Carl Wittkopp
For Money Morning

Carl Wittkopp writes for Money Morning and has a diploma in Financial Planning. He specialises in technical analysis.

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