ASX 200 rises 1.5%

The S&P/ASX 200 Index (ASX:XJO) went up around 1.5% today. However, the Link Administration Holdings Ltd (ASX:LNK) share price fell 13.5%.
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ASX 200

The S&P/ASX 200 Index (ASX: XJO) went up 1.5% today to 6,684 points.

Here are some of the highlights on the ASX today:

Link Administration Holdings Ltd (ASX: LNK)

The Link share price fell by 13.5% after making an announcement today regarding the takeover offer.

A month ago the company received a conditional, non-binding indicative takeover proposal from SS&C Technology Holdings to acquire 100% of the shares in Link.

However, on 3 January 2021, Link received a letter from SS&C stating it has withdrawn its takeover offer.

The Link board said it will continue to consider all alternatives to maximise value for shareholders. One of the things that Link is considering a potential separation through a merger of its interest in Torrens Group Holdings (TGH) (and its core asset, PEXA). Link will also explore a trade sale of its interest in TGH from 18 January 2021.

Collection House Limited (ASX: CLH)

The Collection House share price fell around 60% today after finally coming out of a trading halt.

It announced that the transaction to recapitalise the business had completed. It has gathered $218.7 million, comprising $148.5 million from the sale of purchase debt ledgers, $15 million from a working capital loan facility and $55.2 million from new senior debt facilities.

Most of that money ($197.2 million) will be used to repay existing senior debt facilities, $6.2 million will be used for refinancing and restructuring costs and $15.3 million will be used for general corporate purposes.

Collection House said that the total consideration for the purchased debt portfolio to Credit Corp Group Limited (ASX: CCP) was determined at the transaction cut-off date of 30 September 2020. The purchaser was entitled to cash received from the PDL portfolio between 1 October 2020 and the settlement date of 31 December 2020, net of an adjustment equivalent to an arms-length collection fee.

Collection House is also entitled to a maximum of $15 million additional consideration from the purchaser, over an eight year period, dependent upon the future performance of the relevant PDL assets.

Further consideration of approximately $3 million to $4 million may be obtained from accounts excluded from the PDL portfolio at the time of settlement and is expected to be potentially received in January 2021, subject to obtaining further individual vendor consents. These funds will be applied in reduction on the company’s new senior debt facilities.

However, the parties received an inquiry from the Australian Competition and Consumer Commission (ACCC) regarding the transaction and have responded to that inquiry. Collection House will continue to assist the ACCC with any further inquiries.

The Credit Corp share price went up by 3.7% today. 

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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Link Administration Holdings Ltd. The Motley Fool Australia has recommended Link Administration Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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