Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

HK Type 4 license through Ballingal Investment Advisors Ltd. 

I'm a highly experienced sell-side analyst with in excess of 22 years of covering Asia Pacific equities, the past 19 years immersed in event strategies encompassing M&A risk arbitrage, directional long/short, stub trades and restructuring.  

My background also includes accountancy (liquidation/bankruptcy/receivership) earlier in my career and as a chief financial officer of a global commodity company based in the US and Mexico.

Pan-Asia Catalysts/Events

Link Admin (LNK AU) Inks Deal With Dye & Durham As Carlyle Dithers

Link Admin (LNK AU): Scheme On Track as Proposal Emerges For RSS Business

Now Link Admin Takes A Bath - Time To Buy

Link Group (LNK AU): KKR Opens The Bidding For PEXA

Link Admin (LNK AU) Goes IPO Route For PEXA Afterall

Quiddity Advisors

Event-Driven

<div>
<p>Back on the 12 October last year,  <a href="https://www.smartkarma.com/entities/link-administration-holdings-ltd" target="_blank" data-smartkarma-citation="entities:970:1" rel="noopener">Link Administration Holdings (LNK AU)</a> <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02292481-2A1255763?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> a conditional, non-binding indicative proposal from a consortium comprising Pacific Equity Partners (PEP) and the Carlyle Group, by way of a Scheme. </p>
<p>The indicative cash price was A$5.20/share, a 30% premium to last close. Perpetual, holding 9.65% of shares out, said it would vote for a firm Offer of $5.20/share and above.</p>
<p>PEP had previously owned Link before it floated the company at A$6.37/share in 2015.</p>
<p>After Link <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02297758-2A1258281?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">said</a> the proposal from PEP/Carlyle "<em>materially undervalued the company</em>", the following events took place:</p>
<div>
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 168.591px;">
<h3>Date</h3>
</td>
<td style="width: 534.94px;">
<h3>Data in the Date</h3>
</td>
</tr>
<tr>
<td style="width: 168.591px;">26-Oct-20</td>
<td style="width: 534.94px;">PEP/Carlyle <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02298663-2A1258716?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">tabled</a> a A$5.40/share non-binding indicative Offer, in cash.</td>
</tr>
<tr>
<td style="width: 168.591px;">28-Oct-20</td>
<td style="width: 534.94px;">Link <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02300645-2A1259592?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">responded</a> that the proposal was not compelling - but gave the consortium DD access nonetheless.</td>
</tr>
<tr>
<td style="width: 168.591px;">7-Dec-20</td>
<td style="width: 534.94px;">Software provider <a href="https://www.smartkarma.com/entities/ss-c-technologies-holdings" target="_blank" data-smartkarma-citation="entities:3464:1" rel="noopener">Ss&amp;C Technologies (SSNC US)</a> pitched a non-binding indicative proposal, by way of Scheme, at A$5.65/share, 4.6% above PEP/Carlyle's proposal.<br><br><em><a href="https://skr.ma/aNsnW" target="_blank" rel="noopener">Link Admin (LNK AU): SS&amp;C Trumps PEP/Carlyle</a></em>
</td>
</tr>
<tr>
<td style="width: 168.591px;">
<p>10-Dec-20</p>
</td>
<td style="width: 534.94px;">
<p>Link <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02320482-2A1269370?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">grants</a> <a href="https://www.smartkarma.com/entities/ss-c-technologies-holdings" target="_blank" data-smartkarma-citation="entities:3464:1" rel="noopener">Ss&amp;C Technologies (SSNC US)</a> due diligence, despite Offer not being compelling. </p>
</td>
</tr>
<tr>
<td style="width: 168.591px;">
<p>3-Jan-21</p>
</td>
<td style="width: 534.94px;">SS&amp;C <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02327774-2A1273133?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">withdraws</a> proposal for Link</td>
</tr>
<tr>
<td style="width: 168.591px;">26-Apr-21</td>
<td style="width: 534.94px;">Bids coming in for Link's 44% stake in PEXA, the digital property settlements group.<br><br><em><a href="https://skr.ma/BxzDT" target="_blank" rel="noopener">Link Admin (LNK AU): PEXA Bidding</a></em>
</td>
</tr>
<tr>
<td style="width: 168.591px;">
<p>28-Apr-21</p>
</td>
<td style="width: 534.94px;">
<p>After PEP/Carlyle <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02367784-2A1294740?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">withdrew</a> its proposal, Link said it had received non-binding indications for PEXA "significantly greater" than the $1.60/share proposed under the PEP/Carlyle Offer.</p>
</td>
</tr>
<tr>
<td style="width: 168.591px;">
<p>27-May-21</p>
</td>
<td style="width: 534.94px;">
<p>Link <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02379094-2A1300378?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> it had received an Offer from KKR, in partnership with <a href="https://www.smartkarma.com/entities/domain-holdings-australia-ltd" target="_blank" data-smartkarma-citation="entities:26033:1" rel="noopener">Domain Holdings Australia (DHG AU)</a>, representing an EV of $3bn for 100% of PEXA, or A$1.38bn for Link's equity stake. <br><br><em><a href="https://skr.ma/NQHcJ" target="_blank" rel="noopener">Link Group (LNK AU): KKR Opens The Bidding For PEXA</a></em></p>
</td>
</tr>
<tr>
<td style="width: 168.591px;">
<p>30 May-21</p>
</td>
<td style="width: 534.94px;">
<p>Link <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02379720-2A1300690?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> it would take PEXA public on with an enterprise value of A$3.3bn.<br><br><em><a href="https://skr.ma/CrBHo" target="_blank" rel="noopener">Link Admin (LNK AU) Goes IPO Route For PEXA Afterall</a></em></p>
</td>
</tr>
<tr>
<td style="width: 168.591px;">
<p>31-May-21</p>
</td>
<td style="width: 534.94px;">
<p><a href="https://www.smartkarma.com/entities/domain-holdings-australia-ltd" target="_blank" data-smartkarma-citation="entities:26033:1" rel="noopener">Domain Holdings Australia (DHG AU)</a><a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02379766-2A1300716?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> it is no longer participating in the PEXA sale process. </p>
</td>
</tr>
<tr>
<td style="width: 168.591px;">
<p>15-Jun-21</p>
</td>
<td style="width: 534.94px;">
<p><a href="https://www.smartkarma.com/entities/pexa-group-ltd" target="_blank" data-smartkarma-citation="entities:34716:1" rel="noopener">PEXA Group (PXA AU)</a> prospectus <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02384387-2A1303417?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">lodged</a></p>
</td>
</tr>
<tr>
<td style="width: 168.591px;">
<p>1-Jul-21</p>
</td>
<td style="width: 534.94px;">
<p>PEXA commenced trading at <a href="https://www.pexa.com.au/news/pexa-lists-on-the-australian-securities-exchange" target="_blank" rel="noopener">$17.13/share</a>. Link held 42.8% at the conclusion of the IPO.</p>
</td>
</tr>
<tr>
<td style="width: 168.591px;">
<p>26-Aug-21</p>
</td>
<td style="width: 534.94px;">
<p>Link announced on-market buybacks up to <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02412381-2A1318563?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">A$150mn</a></p>
</td>
</tr>
</tbody>
</table>
</div>
<h3>The New News</h3>
</div>
<div>
<p>Carlyle has returned to the well with a non-binding offer of <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02447824-2A1336602?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">$5.38/share</a>, by way of a Scheme, valuing Link at A$2.8bn.</p>
<p>The Offer consideration is $3.00/share in cash for Link's core business, plus a pro-rata distribution of Link’s 42.8% stake in <a href="https://www.smartkarma.com/entities/pexa-group-ltd" target="_blank" data-smartkarma-citation="entities:34716:1" rel="noopener">PEXA Group (PXA AU)</a>, which has a look-through value of A$2.38/share. Therefore Carlyle's proposal values each Link share at $5.38/share, a 24.2% premium to last close.</p>
</div>
<div>
<p>That looks to be a compelling Offer.</p>
</div>
<div>
<p>More below the fold.</p>
<p></p>
</div>


Back on the 12 October last year,  Link Administration Holdings (LNK AU) announced a conditional, non-binding indicative proposal from a consortium comprising Pacific Equity Partners (PEP) and the Carlyle Group, by way of a Scheme. 
The indicative cash price was A$5.20/share, a 30% premium to last close. Perpetual, holding 9.65% of shares out, said it would vote for a firm Offer of $5.20/share and above.
PEP had previously owned Link before it floated the company at A$6.37/share in 2015.
After Link said the proposal from PEP/Carlyle "materially undervalued the company", the following events took place:





Date


Data in the Date



26-Oct-20
PEP/Carlyle tabled a A$5.40/share non-binding indicative Offer, in cash.


28-Oct-20
Link responded that the proposal was not compelling - but gave the consortium DD access nonetheless.


7-Dec-20
Software provider Ss&amp;C Technologies (SSNC US) pitched a non-binding indicative proposal, by way of Scheme, at A$5.65/share, 4.6% above PEP/Carlyle's proposal.  Link Admin (LNK AU): SS&amp;C Trumps PEP/Carlyle




10-Dec-20


Link grants Ss&amp;C Technologies (SSNC US) due diligence, despite Offer not being compelling. 




3-Jan-21

SS&amp;C withdraws proposal for Link


26-Apr-21
Bids coming in for Link's 44% stake in PEXA, the digital property settlements group.  Link Admin (LNK AU): PEXA Bidding




28-Apr-21


After PEP/Carlyle withdrew its proposal, Link said it had received non-binding indications for PEXA "significantly greater" than the $1.60/share proposed under the PEP/Carlyle Offer.




27-May-21


Link announced it had received an Offer from KKR, in partnership with Domain Holdings Australia (DHG AU), representing an EV of $3bn for 100% of PEXA, or A$1.38bn for Link's equity stake.   Link Group (LNK AU): KKR Opens The Bidding For PEXA




30 May-21


Link announced it would take PEXA public on with an enterprise value of A$3.3bn.  Link Admin (LNK AU) Goes IPO Route For PEXA Afterall




31-May-21


Domain Holdings Australia (DHG AU)announced it is no longer participating in the PEXA sale process. 




15-Jun-21


PEXA Group (PXA AU) prospectus lodged




1-Jul-21


PEXA commenced trading at $17.13/share. Link held 42.8% at the conclusion of the IPO.




26-Aug-21


Link announced on-market buybacks up to A$150mn





The New News


Carlyle has returned to the well with a non-binding offer of $5.38/share, by way of a Scheme, valuing Link at A$2.8bn.
The Offer consideration is $3.00/share in cash for Link's core business, plus a pro-rata distribution of Link’s 42.8% stake in PEXA Group (PXA AU), which has a look-through value of A$2.38/share. Therefore Carlyle's proposal values each Link share at $5.38/share, a 24.2% premium to last close.


That looks to be a compelling Offer.


More below the fold.



Link Admin (LNK AU): Carlyle Returns. With A Lower Offer