The Link Administration Holdings Ltd (ASX: LNK) share price is having a difficult time on Thursday.
In morning trade, the administration services company's shares are down over 10% to $3.02.
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Why is the Link share price tumbling?
Investors have been selling down the Link share price this morning after the company released an update on a takeover approach.
Early in October, Link received a conditional, non-binding and indicative proposal from Dye & Durham Corporation (D&D) to acquire its Corporate Markets business and all of the BCM business for a total cash consideration of $1.27 billion on a cash and debt free basis.
According to today's update, despite engaging with D&D over a period of over two months (compared to D&D's proposed 10 business days), the conditional non-binding proposal has not been able to be progressed to a transaction that is certain, has committed financing, reflects appropriate value, and is on appropriate terms.
The release notes that the latest form of the conditional non-binding proposal from D&D involved a material portion of the consideration being deferred and payable after a two-year period. D&D also proposed a change in the mix of businesses being acquired.
In light of this, the company has ceased discussions with D&D and no binding transaction has resulted.
Trading update
Failing to stop the Link share price from sinking today has been the release of a trading update.
That trading update reveals that Link is trading in line with expectations and is forecasting low single digit revenue growth in FY 2023, with operating EBITDA growth of 8% to 10%.
For the first half of FY 2023, Link expects operating EBIT to be in the $75 million to $80 million range, which is run-rating in line with FY 2023 guidance.
