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UPDATE 3-Link Administration's proposed $1.6 bln buyout by Canada's D&D falls through

·2 min read

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Conditions necessary for deal not met - Link

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Link says court declined to make orders approving scheme

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Link still considering special dividend for shareholders

(Adds further details about the deal)

By Harish Sridharan

Sept 23 (Reuters) - Link Administration's A$2.47 billion ($1.63 billion) proposed deal to be acquired by Canada's Dye & Durham (D&D) fell through on Friday, after a local court denied approving the offer citing failure to meet key conditions.

The share registry firm had flagged this week that Britain's Financial Conduct Authority (FCA) could fine Link's UK unit, Link Fund Solutions Ltd (LFSL), 50 million pounds in addition to potential 306.1 million pounds in redress over its management of its now-defunct LF Woodford Equity Income Fund.

LFSL is being investigated by the FCA for the collapse of Woodford fund in June 2019 that left more than 300,000 investors nursing losses.

Last week, the regulator had approved D&D's acquisition of LFSL, subject to D&D committing to make up for any shortfall within LFSL in the amount available to cover any redress payments.

The FCA had said Link had 14 days to say if it will challenge its fine or resolve the case by agreement. However, Link considered that liabilities related to the probe were confined to LFSL.

On Friday, Link said the conditions necessary for the deal to go through, including the requirements from the FCA, have not been met. It is still considering paying its shareholders a special dividend of A$0.08 per share.

The developments come after D&D and Link had received a nod from the Australian competition regulator for the buyout earlier this month. But the FCA's fine and the redressal payment had already cast doubts over the long-running deal talks, which saw D&D lower its offer price multiple times.

The increasing roadblocks in the Link-D&D deal underscore a growing problem of execution risks in Australian mergers and acquisitions in a year marked with share market gyrations and hard-line regulatory approach. This is in strong contrast to 2021 which saw a flurry of blockbuster takeovers, including those of Sydney Airport and Afterpay.

Recently, Australia's biggest private equity buyout hit a stalemate when buyout specialist KKR withdrew an indicative offer for hospital operator Ramsay Health Care . ($1 = 1.5138 Australian dollars) (Reporting by Harish Sridharan in Bengaluru; editing by Uttaresh.V and Rashmi Aich)