Market News

Dye & Durham Reduces Link Group Takeover Offer; Insiders are Bullish

Story Highlights

Dye & Durham has reduced its takeover offer for the Australian-based Link Group. If this revised deal goes through, it will create much more value for DND investors.

Dye & Durham (TSE: DND) provides business support services to organizations, government, and private firms through its cloud-based platform. The company offers legal services like due diligence, securities filings, litigation solutions, investigative services, court filing, KYC services, and financial risk management services.

Acquisitions are a big part of the company’s growth strategy. Indeed, in December 2021, DND announced a substantial C$3.2 billion offer to acquire Australian-based Link Administration Holdings. This equated to A$5.50 on a per-share basis.

However, Dye & Durham announced today that it will be lowering its takeover bid by 22% to A$4.30 per share. The reason for the revised offer was attributed to deteriorating market conditions and an undertaking to the Australian Competition and Consumer Commission, which has not given DND its approval yet for the acquisition.

If this revised offer goes through, it will benefit investors of DND, as it would reduce the debt burden that the company would have to take on to finance the deal.

Insider Buying

Taking a look at DND’s insider transactions, there has not been a lot of activity in terms of transaction volume. However, the dollar volume has been quite impressive, with the most noteworthy purchase coming from 10%+ shareholder Plantro, which purchased $52.5 million worth of shares just last month.

As a result, insiders appear to be very confident about Dye & Durham, as demonstrated by the TipRanks Insider Confidence Signal. Currently, the indicator is positive and better than the sector average:

Analyst Recommendations

Dye & Durham has a Strong Buy consensus rating based on three Buys assigned in the past three months. The average Dye & Durham price target of C$46.67 implies 110% upside potential.

Final Thoughts

DND is still waiting for the approval of the Australian Competition and Consumer Commission, which has been a roadblock so far because it has concerns related to the acquisition. Nonetheless, this has provided DND with an opportunity to lower its takeover bid.

If this lower bid ends up going through, it will allow the company to create more value for shareholders, as it will reduce the required debt burden of financing the acquisition.


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