The collapse of Neil Woodford’s fund in 2019 has thrown a wrench into a Canadian firm’s proposed acquisition of Australia’s Link Administration Holdings Ltd.
(Bloomberg) — The collapse of Neil Woodford’s fund in 2019 has thrown a wrench into a Canadian firm’s proposed acquisition of Australia’s Link Administration Holdings Ltd.
Toronto-based Dye & Durham Ltd. said UK regulators won’t approve the deal unless it agrees to cover restitution or other liabilities stemming from Link’s role in the Woodford blowup, to a maximum of £306 million ($358 million).
Dye & Durham is assessing the impact of that demand made by the UK’s Financial Conduct Authority, according to a statement Monday. If it can’t accept those terms, then the companies might not be able to close the $1.7 billion deal, which had already been repriced lower after the sharp selloff in technology stocks.
Dye & Durham “must now decide whether to proceed with the transaction at a higher effective purchase price, renegotiate with Link and revise the terms of its offer to account for the incremental liability, or walk away from the deal,” BMO Capital Markets analyst Thanos Moschopoulos said in a note.
Dye & Durham was down 2% to C$14.39 at 1:56 p.m. in Toronto. The shares have fallen 68% this year.
Link was the fund administrator on the LF Woodford Equity Income Fund, which was liquidated nearly three years ago as Woodford, one of the UK’s most celebrated stock pickers, was ousted as its manager. The FCA began an investigation into Link in 2019 as the fund was beginning to unravel, according to Dye & Durham’s statement.
Read more: Dye & Durham Agrees to $1.7 Billion Deal For Australia’s Link
(Updates with analyst comment, share price)
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