Dye & Durham CEO Matt Proud told analysts on Thursday night (AEST) that the company has funding for the takeover and will continue the deal until regulatory approval.
Proud said this after delivering strong financial results for the March quarter, including 78 percent revenue growth to $ 122.9 million and adjusted EBITDA growth of 78 percent to $ 66.8 million. The results caused a paint splash of 13.5 percent & Durham stock price.
Link’s situation has revealed at least four aspects of the unique psychology of the market around takeover proposals.
First, in the period from the submission of the application to its approval by shareholders. the main buyer and seller is an arbitrage hedge fund risk manager who often knows nothing about the business. They play the market to close the spread between the bid price and the market price.
Second, very few people in the market do the work to understand what a deal is expected to do, and they tend to forget about the high barriers to jump before the deal can be canceled.
Third, when hedge funds are suddenly intimidated and go “risk,” the spread spreads, and other investors panic. This panic, which is partly due to the bias of confirmation, feeds on itself.
Fourth, investors are not thinking enough about what Plan B might be if the bid fails. In other words, the link may cost a lot more than Friday’s closing at $ 4.41 if the deal breaks down.
In this acquisition, if either party terminates the transaction without protection from “significant adverse changes”, a break fee of $ 28.6 million will be paid.
When the deal is concluded, Link chairman Michael Carapiet will sigh with relief, given that since October 2020 there have been at least four different proposals for some or all of Link.
