Australia’s competition regulator on Thursday raised concerns about Canadian firm Dye & Durham Ltd’s (D&D) proposed C$3.2 billion ($2.48 billion) acquisition of share registry company Link Administration Holdings Ltd.
Shares of Link tumbled as much as 10.2% to hit their lowest since May 15, 2020, after the news came in, while the broader market rose about 1%.
The proposed deal will give cloud-based software firm D&D access to Link’s prized 42.8% stake in PEXA Group Ltd, which was listed last July after Link rejected a bid by KKR & Co. to buy the online realty firm.
The Australian Competition and Consumer Commission said in a statement that while the merger of D & D and Link itself did not raise any issues, aligning PEXA with D&D could significantly increase vertical integration in the conveyancing sector.
He said the regulator had “significant” preliminary concerns that the deal would enable D&D and PEXA to engage in mutually preferential dealings.
Link said the statement was the regulator’s preliminary view and maintained its earlier stance that the offer was fair and reasonable to its shareholders.
In December last year, the Canadian company offered Link shareholders A$5.50 ($3.85) in cash for each share, topping a bid put forth by Carlyle Group.