The Link Administration Holdings Ltd (ASX: LNK) share price is sinking again on Wednesday.
At the time of writing, the administration services company's shares are down 5% to $3.28.
This latest decline means the Link share price is now down over 40% since the start of the year.
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Why is the Link share price sinking?
Investors have been selling down the Link share price today after the company provided an update on the Woodford investigation.
Link is the owner of Link Fund Solutions Limited (LFSL), which managed the now-collapsed Woodford Equity Income Fund.
According to today's update, the UK Financial Conduct Authority (FCA) has issued a draft warning notice in accordance with the settlement decision procedure to LFSL in respect of the Woodford Investigation.
The FCA has assessed the appropriate penalty as 50 million pounds (A$85 million) plus a restitution payment of approximately 306.1 million pounds (A$520 million).
What impact will this have on its takeover?
Things don't look good for Link's takeover. While the draft notice is not a final decision, Link notes that it triggers the Woodford Matters condition under the scheme implementation deed with Dye & Durham.
Earlier this week, Dye & Durham amended its takeover offer to be $3.81 per share plus a contingent payment.
However, if this draft notice becomes definitive, there will be no contingent payment. Furthermore, the penalty of 50 million pounds was not accounted for previously and could also impact the offer price. That's if Dye & Durham doesn't just walk away from talks.
The Link board has already said it would be unable to recommend a $3.81 per share offer. So, it appears highly unlikely that Dye & Durham will return with an improved offer that could be recommended given this news.
This goes some way to explaining why the Link share price is trading at such low levels today.
