Shares of Link fell as much as 10.2% to their lowest level since May 15, 2020 after the news broke, while the broader market rose around 1%.
The proposed deal will give cloud software company D&D access to Link’s valuable 42.8% stake in PEXA Group Ltd, which went public last July after Link rejected an offer from KKR & Co to buy real estate business online.
The Australian Competition and Consumer Commission (ACCC) said in a statement that while the merger of D&D and Link itself raises no issues, aligning PEXA with D&D could significantly increase vertical integration. in the real estate business.
“Consumers may not be familiar with these companies by name, but this acquisition is relevant to anyone buying or selling a property,” said Mick Keogh, Vice President of the ACCC.
He said the regulator had “significant” preliminary concerns that the deal would allow D&D and PEXA to engage in mutually preferential transactions.
Link said the statement was the regulator’s preliminary view, and maintained its earlier position that the offer was fair and reasonable to its shareholders.
PEXA declined to comment, while D&D did not immediately respond to a request for comment.
In December last year, the Canadian company offered Link shareholders A$5.50 ($3.85) in cash for each share, beating an offer made by the Carlyle Group.
D&D provides cloud-based software and technology solutions to several companies, including lawyers and real estate agents. PEXA’s PEXA Exchange product allows users to make property settlements electronically through a process called e-conveyancing.
($1 = 1.2891 Canadian dollars)
($1 = 1.4294 Australian dollars)