Link sells 10% of its PEXA shareholding

Link Group intends on using the proceeds of the “PEXA Selldown” to repay borrowings, which is expected to reduce Link Group’s financing costs. The PEXA selldown will proceed at $13.50 per PEXA share.

Link announced on 4 October 2022 that it would be engaging with applicable regulators (such as the Australian Tax Office) in regard to a potential in-specie distribution of at least 80 per cent of Link Group’s PEXA shares with its shareholders.

Shareholder approvals are expected in December 2022 with the share distribution expected to commence in January 2023.

Link Group’s managing director and chief executive Vivek Bhatia stated: “We are proud of the performance of PEXA since our initial investment in 2011 and Link Group is pleased to have been part of its success as Australia’s leading Electronic Lodgment Network Operator.

“The PEXA Selldown will provide Link Group with balance sheet flexibility as it executes on its strategic plan, and the proposed in-specie distribution of the remainder of Link Group’s PEXA shares will allow Link Group shareholders to continue to gain exposure to a quality asset that is planned to generate attractive cash flows with multiple growth levers.”

D&D acquisition of Link Group approved by ACCC

Earlier this year, the Australian Competition and Consumer Commission (ACCC) announced that it would not oppose the proposed acquisition of Link Group by Dye & Durham Corporation (D&D).

Under the terms of a court-enforceable undertaking that was agreed to by D&D, the company was obligated to sell off its existing Australian businesses to a purchaser approved by the ACCC.

As a result of the acquisition, D&D acquired the 42.77 per cent shareholding in PEXA.

Before the acquisition’s approval, the ACCC cited significant competition concerns due to D&D’s vertical integration of its information broking services, conveyancing, and legal practice management software with PEXA’s Electronic Lodgment Network.

ACCC chair Gina Cass-Gottlieb stated at the time that the alignment between D&D and PEXA would have led to “a near monopoly” without the divestment of D&D’s Australian businesses.  

“We were conscious of PEXA’s position as the only fully operational Electronic Lodgment Network and the sensitive period of transition underway as interoperability between Electronic Lodgment Network Operators emerges,” Ms Cass-Gottlieb said.

[RELATED: ACCC approves D&D acquisition of Link]