Japan-based Mitsubishi UFJ Trust and Banking, a subsidiary of MUFG, is set to acquire Link Administration (Link Group), an Australian pension administration company, in a deal worth A$1.2bn ($810m).
In this regard, the parties have entered into a scheme implementation deed.
Mitsubishi UFJ Trust and Banking is offering Link Group’s shareholders A$2.26 per share in cash per share, including a dividend of A$0.16. The deal implies an enterprise value of A$2.1bn ($1.4bn) for Link Group, which is presently listed on the Australian Securities Exchange (ASX).
According to the Australian firm, the offer represents a premium of 32.9% to its closing price on 15 December 2023.
Its board has unanimously recommended shareholders vote in favour of the deal should there be no superior proposal. The recommendation is also conditional on an independent expert determining the scheme to be in the best interests of the company’s shareholders.
Link Group chair Michael Carapiet said: “While the Link Group Board has and remains confident about the company’s future, we acknowledge that the Scheme provides shareholders with the opportunity to receive cash value at a significant premium.
“The Board’s unanimous recommendation was based on a thorough evaluation of various factors, including Link Group’s intrinsic value under different scenarios and the potential medium-term share price without the Scheme.
“The Board believes that the proposed transaction will benefit both shareholders and stakeholders, and is in line with the Board’s priority to deliver shareholder value.”
Link Group is said to serve about 41% of private pension members in Australia, totalling around 10 million accounts.
Additionally, the company offers stock administration services that facilitate connections between issuers and stakeholders in Australia, the UK, and India.
Link Group’s digital platform is claimed to be utilised to deliver administration services to more than 100 million beneficiaries globally.
The company has a workforce of around 6,300 employees and its revenue for the fiscal year ended 30 June 2023 was A$956m.
According to MUFG, the acquisition of global pension and stock administration functions will empower the group to expedite its global business expansion by gaining access to Australian funds and global corporate clients.
Furthermore, it will help the group’s global investor services business in providing a diverse range of solutions. This is expected to enable the strengthening of MUFG’s global reach, fostering growth opportunities, and expanding its overall business scale.
The scheme, which is subject to approval by Link Group’s shareholders along with court approval, regulatory approvals, and the meeting of other preceding conditions, is anticipated to be implemented in June 2024.
For Link Group, Macquarie Capital and UBS are serving as financial advisers, while Herbert Smith Freehills is providing legal advice.
