The Link Administration Holdings Ltd (ASX: LNK) share price is on the move on Monday morning.
At the time of writing, the administration services companyâs shares are up slightly to $3.46.
Why is the Link share price rising?
Investors have been bidding the Link share price higher today after the company released an update on its plans with its PEXA Group Ltd (ASX: PXA) stake.
According to the release, the company has sold 10% of its existing 42.77% shareholding in the property settlements platform company for a 4.8% discount of $13.50 per share.
This led to Link generating total net proceeds of $101.9 million, which will now be used to repay its borrowings.
But what about the rest of the holding?
The good news for shareholders is that Link has decided that it will distribute at least 80% of its remaining shares in PEXA to Link shareholders via an in-specie distribution.
Link intends to seek shareholder approval for the plan in December, with the distribution then to occur in January if given the thumbs up.
Link CEO and managing director, Vivek Bhatia, commented:
We are proud of the performance of PEXA since our initial investment in 2011 and Link Group is pleased to have been part of its success as Australiaâs leading Electronic Lodgement Network Operator. The PEXA Selldown will provide Link Group with balance sheet flexibility as it executes on its strategic plan, and the proposed in-specie distribution of the remainder of Link Groupâs PEXA shares will allow Link Group Shareholders to continue to gain exposure to a quality asset that is planned to generate attractive cash flows with multiple growth levers.
The post Link share price higher on PEXA update appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Link Administration Holdings Ltd and PEXA Group Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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