Category: Stock Market

At lunch on Friday, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week in a positive fashion. The benchmark index is currently up 0.6% to 7,471.7 points.

Here’s what is happening on the ASX 200 on Friday:

REA Group quarterly update

Investors have been bidding the REA Group Limited (ASX: REA) share price higher today after it released its first quarter update. For the three months ended 30 September, the property listings company delivered a 35% increase in revenue to $264 million and a 25% lift in EBITDA including associates to $158 million. This was driven by growth across all Australian segments, underpinned by an increase in national listings.

Link receives takeover approach

The Link Administration Holdings Ltd (ASX: LNK) share price is surging higher after it received a takeover approach from Carlyle Group. The private equity firm has tabled a conditional, non-binding indicative proposal to acquire Link for $5.38 per share. This comprises $3.00 cash per share and a pro rata distribution of Link’s shareholding in PEXA Group Limited (ASX: PXA) valued at $2.38 per share. Link is considering the offer but hasn’t granted Carlyle with due diligence at this stage.

News Corp impresses

The News Corp (ASX: NWS) share price is rocketing higher following the release of an impressive first quarter update. The media giant reported an 18% increase in revenue to US$2.5 billion and a 53% jump in EBITDA to US$410 million. One of the drivers of this strong result was its Dow Jones media segment, which recorded its highest quarter revenue and profitability since acquisition.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Friday has been the Link share price with an 11% gain following its takeover approach. The worst performer has been the Clinuvel Pharmaceuticals Limited (ASX: CUV) share price with a 16% decline. This morning Jefferies downgraded the biopharmaceutical company’s shares to a hold rating from buy.

The post ASX 200 (ASX:XJO) midday update: REA and News Corp impress, Link receives takeover offer appeared first on The Motley Fool Australia.

More reading

• Expert highlights big threat to the Zip (ASX:Z1P) share price
• Why the Link (ASX:LNK) share price is surging 12% higher today
• News Corp (ASX:NWS) share price in focus as first quarter delivers growth
• Why the Link (ASX:LNK) share price could rocket higher today
• REA Group (ASX:REA) share price on watch after delivering strong Q1 growth

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. owns shares of and has recommended Link Administration Holdings Ltd. The Motley Fool Australia has recommended REA Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Zip Co Ltd (ASX: Z1P) share price fell to a 10-month low this morning as a threat to its business model looms large.

Shares in the buy now, pay later (BNPL) company slipped 0.5% to $6.17 in morning trade when the S&P/ASX 200 Index (Index:^AXJO) gained 0.5%.

At least the decline isn’t as bad as its bigger rival. The Afterpay Ltd (ASX: APT) share price tumbled 4.3% to $119.10 at the time of writing.

Shine comes off Zip share price

The prospect of rising interest rates has taken the gloss off tech shares. But there’s another big risk factor to the Zip share price and to the sector.

This threat comes in the form of a surcharge. The Reserve Bank of Australia (RBA) recommended that BNPL companies cannot stop merchants from passing the cost of using such services to consumers.

Big risk to BNPL shares

UBS undertook a survey and most consumers said they would not use BNPL if they were slugged with extra fees. And who can blame them as the fees could be pretty high.

“71% of Afterpay’s customers surveyed agreed that they would not use it if charged a 4% fee, only 10% would (19% neither agreed nor disagreed),” said UBS.

“Users of BNPL services were generally unaware of BNPL’s cost to merchants: once made aware, 30% stated they would not use BNPL at small businesses and 23% at large businesses.”

Regulatory risk hangs over the Zip share price

The silver-lining here is that the fee-passthrough is only relevant in Australia. Both Zip and Afterpay are banking on the US and Europe for most of their growth.

On the flipside, one can’t rule out other jurisdictions making similar rules about fees. One has to wonder if consumers in other countries have a strong distaste for fees as we Aussies.

While it is too early to panic, ASX investors should be watching the regulatory risks closely as this can have a big impact on the Zip share price and Afterpay share price.

Strong consumer awareness

Another saving grace is that consumer awareness for BNPL services is very high. UBS’ survey found that 88% of non-BNPL consumers have heard of the service in 2021. This compares to 2019 when only 79% of this group were aware and 2020 when 85% knew what BNPL was.

And if you were wondering which BNPL company had the highest mindshare, this would be Afterpay. Around 91% of non-users recognised the Afterpay brand.

This compares with 55% for Zip, 18% for Klarna and 17% for Humm Group Ltd (ASX: HUM).

Higher risk and lower profit

“The survey again indicates a bifurcation of BNPL customers like a credit card book, i.e, a portion of low risk, affluent users, and a riskier portion that use it as credit,” said UBS.

“We therefore see a risk ‘free-riders’ may use BNPL less if surcharged, causing adverse customer selection (higher credit risks) and lower sales volumes for BNPL businesses.”

UBS has a “sell” recommendation on the Zip share price and “neutral” on the Afterpay share price.

The post Expert highlights big threat to the Zip (ASX:Z1P) share price appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: REA and News Corp impress, Link receives takeover offer
• Own ASX BNPL shares? These were the best performers during October
• Afterpay (ASX:APT) share price set to tumble after Square’s shares sink
• Get ready for a 10% share market correction: expert
• 5 things to watch on the ASX 200 on Friday

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ASX cannabis shares were nothing short of a mixed bag last month. Several names did well but a large body of shares missed the benchmark completely.

For some context, the S&P/ASX 200 Health Care index (ASX: XHJ) regained steam over the course of last month. It came off a 3-month low to post a solid return of almost 5%. With that in mind, it was pleasing for investors to see several ASX cannabis shares lead the index.

So, without further delay, here are 3 of the best performing ASX cannabis shares in October.

Incannex Healthcare Ltd (ASX: IHL)

Shares in medicinal cannabis innovator Incannex climbed 34% in October, reaching a closing high of 47 cents at the end of the month. This was also a new 52-week high, with the share price coming off a low of 33 cents earlier in the month.

A suite of regulatory and company-specific tailwinds helped prop up the Incannex share price ahead of its peers.

For instance, it engaged drug manufacturer Procaps Laboratories S.A to develop its IHL-42X soft gel capsules. IHL-42X is Incannex’s proprietary cannabinoid formula and that is used to treat obstructive sleep apnoea (OSA). Incannex has filed patent protection in several jurisdictions for the drug.

In other news, studies have confirmed success in Incannex’s IHL-675A label. It has shown to be effective in reducing inflammatory-type symptoms in conditions like rheumatoid arthritis.

Incannex also filed for F-1 registration to list on the US NASDAQ exchange earlier in the year, which is akin to an initial public offering (IPO) in Australia.

Incannex shares have started the session poorly today, and are now trading 1% down at 52.5 cents apiece.

Creso Pharma Ltd (ASX: CPH)

After trading sideways for the majority of October, investors piled into Creso Pharma shares in the final days of the month after a suite of market updates.

The cannabis-focused biotech advised it had purchased Canadian life sciences entity ImpACTIVE for $217,000.

Creso intends to widen its territory in North America, seeking to penetrate those markets further with its product line.

Aside from this, Creso made a curious move in releasing a prospectus outlining the sale of bonus options to its shareholders.

Whilst the company stated this was in part a reward to shareholders for their support, it actually serves a deeper purpose. The options, if exercised in full, give Creso access to approximately $100 million in liquidity by earning 25 cents per option.

Not only that, the contracts are tradeable on any ASX exchange that permits derivatives trading. This gives investors the opportunity to participate in price discovery of these assets.

To cap off the month, Creso also reported its quarterly earnings, recognising a 92% year-on-year gain in revenue.

In early trading today, Creso Pharma shares are almost 4% higher at 14 cents each.

Althea Group Holdings Ltd (ASX: AGH)

Medicinal cannabis distributor Althea Group was also a net winner last month, with its share price rising 21%.

Despite no announcements from Althea early in the month, investors still bid up its share price from a low of 24 cents on 4 October.

Investors started buying in rapid succession, sending its share price north in almost vertical fashion over a 2-week period. The resulting 32% gain corresponded with the performance of the broader S&P/ASX 200 Health Care index.

Unfortunately for Althea shareholders, the steam was let out at express-pace after the company released its quarterly update.

Although it posted a record quarter with 116% year-on-year growth in customer receipts — up 57% on the prior quarter – investors were quick to exit their positions. This created a wave of selling pressure on Althea’s share price. It fell sharply by about 10% in the final 2 weeks of October.

The Althea share price is flat today at 27 cents.

A quick rundown on medicinal cannabis

There is no special type of cannabis plant (also known as marijuana) that is medical. Medicinal cannabis is just regular old cannabis.

Cannabis has been used as medicine for thousands of years in many cultures. It is only relatively recently that the plant has gained traction as a mainstream treatment for various ailments.

Medicinal cannabis production is highly regulated in order to comply with Australian medical standards. Our standards are (correctly so) some of the tightest in the world.

The plant’s primary active compounds are cannabinoids called delta-9 tetrahydrocannabinol (also known as THC), terpenes, and cannabidiol (CBD).

It is these three ingredients that contain the medicinal properties of the cannabis plant.

They work by binding to the body’s own cannabinoid receptor sites – yes, we have our own internal cannabinoid system – to produce a range of therapeutic effects. These include pain relief, anti-nausea and appetite enhancement.

They can even stabilise uncontrolled body movements in neurological disorders like Parkinson’s disease.

The post These were the best performing ASX cannabis shares in October appeared first on The Motley Fool Australia.

More reading

• Own biotech shares? These were the best performers during October
• Why the Creso Pharma (ASX:CPH) share price is lifting today
• Creso Pharma (ASX:CPH) share price spikes on bonus options issue
• Here’s why the Creso Pharma (ASX:CPH) share price is leaping 9% today
• Incannex (ASX:IHL) share price leaps 6% on manufacturing update

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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 Bruce Jackson.

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The Sigma Healthcare Ltd (ASX: SIG) share price is pushing higher on Friday. This comes after the company provided an update on the current proposal to merge with Australian Pharmaceutical Industries Ltd (ASX: API).

At the time of writing, Sigma shares are fetching for 56 cents apiece, up 2.75%.

Sigma pulls out of API bidding war

In today’s statement, Sigma advised that it has decided not to proceed with the merger proposal of API. It’s worth noting that this leaves the door open for Wesfarmers Ltd (ASX: WES) to secure its bid.

In late September, the company submitted a non-binding proposal, offering $1.57 per share to acquire 100% of API. Essentially, this valued the pharmaceutical chain at around $773 million.

The mostly-scrip offer would have seen API shareholders walk away with 35 cents cash and 2.05 Sigma shares for every API share owned.

The Sigma board noted that $45 million worth of annual synergies could be created if the deal went through.

Sigma chair, Ray Gunston touched on the merger proposal, saying:

Sigma believed it made economic, commercial and strategic sense to pursue the merger proposal between Sigma and API on the terms we presented. However, after further assessment, and in the context of the competitive bid process with its changing transaction and economic considerations, Sigma has made the decision not to proceed with this current proposal.

Mr Gunston went on to talk about the company’s future, adding:

Sigma remains confident of our growth prospects without a merger with API and the Board and management have continued to focus on longer term growth in our core operations. The Sigma team will keep on working to finalise the completion of our infrastructure upgrade, including our ERP project, and to remain focused on leveraging our infrastructure to create greater shareholder value.

Review on the Sigma share price

Over the last 12 months, Sigma shares have traversed mostly sideways with a few hiccups along the way. Its shares are up just around 5% over the period but are down more than 10% when looking at year-to-date.

Based on today’s price, Sigma presides a market capitalisation of roughly $577.31 million, with approximately 1.06 billion shares outstanding.

The post Sigma (ASX:SIG) share price edges higher on API merger proposal update appeared first on The Motley Fool Australia.

More reading

• What’s going on with the Wesfarmers (ASX:WES) API takeover bid?
• Wesfarmers (ASX:WES) share price dips as API battle heats up
• Wesfarmers (ASX:WES) share price struggles amid latest API speculations

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The AIC Mines Ltd (ASX: A1M) share price has returned from its lengthy suspension on Friday and is rocketing higher.

At the time of writing, the copper miner’s shares are up 60% to 36 cents.

Why is the AIC Mines share price rocketing higher?

This morning the AIC Mines share price returned to trade for the first time since August after completing a $40 million capital raising.

AIC Mines’ shares were suspended in August whilst it sought approval for mining investment company FMR to acquire a 28% to 30% interest in the company as part of a related deal.

Under section 606 of the Corporations Act, unless an exception applies, an entity is prohibited from acquiring a greater than 20% interest in the voting shares of a listed company without making a takeover offer.

However, one of the exceptions is for the transaction to be approved by shareholders. That approval was duly granted at a shareholder meeting late last month after 99.91% of votes were cast in favour of the resolution.

Why did AIC Mines raise $40 million?

AIC Mines raised $40 million at 25 cents per new share in order to fund the acquisition of the Eloise Copper Mine from FMR.

Management believes the deal heralds a new and exciting stage for the company. It notes that it creates a new growth-oriented ASX-listed copper mining company with strong free cashflow and the ability to add value through exploration success, resource growth, operational reliability, and regional consolidation.

AIC’s Managing Director, Aaron Colleran, commented: “Considerable effort has gone into completing the Eloise transaction and I am very thankful for the herculean efforts of both the AIC and FMR employees who have assisted with the completion process and ownership transition. The opportunity ahead of us is very exciting.”

“We can now turn our attention to capturing the potential which we believe exists at Eloise. AIC’s exploration strategy for Eloise will focus on both extensions to the known resource areas and the discovery of new satellite lodes within the Eloise tenements. There is clear potential to extend the mine life well beyond five years,” he added.

The post Why the AIC Mines (ASX:A1M) share price is rocketing 60% higher today appeared first on The Motley Fool Australia.

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• Antisense Therapeutics (ASX:ANP) share price tumbles 8% amid capital raise
• Green Technology Metals (ASX:GT1) shares are about to hit the market. Here’s what you should know
• BetaShares Crypto Innovators ETF (ASX:CRYP) breaks opening day records…now what?
• Why the Link (ASX:LNK) share price is surging 12% higher today

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 no position in any of the stocks mentioned. 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 Bruce Jackson.

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The Woodside Petroleum Limited (ASX: WPL) share price is in the red in late morning trade, down 1.6% to $22.61 per share.

This comes as the S&P/ASX 200 Index (ASX: XJO) is marching higher, up 0.5% at the time of writing. And Woodside’s share price doesn’t look to be getting much reprieve from its oil and gas reserve update, released this morning.

What reserve update was reported?

The company’s announcement that the 1P total reserves and resource estimates across the Greater Pluto region have increased hasn’t boosted the Woodside share price this morning.

According to the release, the 1P total reserves at Pluto, located offshore in Western Australia, increased by approximately 10% following a just-completed review. 1P refers to proven reserves.

Investors may be focused on the 2P total reserves, which include both proven and probable reserves. Following the review, the 2P total reserves decreased by approximately 10%.

Woodside’s CEO Meg O’Neill said:

The 4D seismic survey undertaken in 2020, together with the performance of the wells in these fields, has enabled us to narrow the 1P and 2P reserves range.

The Greater Pluto region is a significant and valuable resource for Woodside. Having already produced more than 440 million barrels of oil equivalent from the Pluto and Xena reserves since start-up in 2012, the Greater Pluto region has 2P total reserves of approximately 360 million barrels of oil equivalent for production in the years ahead.

The Woodside share price, along with the other ASX 200 energy shares, has also come under some pressure this week as oil prices edged lower.

Following a strong run higher, which saw Brent crude still trading for US$84.71 per barrel on Monday, Brent is currently trading at US$80.54.

The 5%, 5-day drop in the benchmark oil price has seen the Woodside share price fall 2.7% since Monday.

Woodside share price snapshot

Despite this week’s retrace, the Woodside share price remains up 23% over the past 12 months. That just beats the 22% gains posted by the ASX 200 in that same time.

Over the past month, Woodside shares are down 10%.

The post Woodside (ASX: WPL) share price slides following mixed reserve update appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Friday
• Why is the Woodside (ASX:WPL) share price slipping and sliding today?
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• 2 more of the best ASX shares to buy in November according to this top broker
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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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 Bruce Jackson.

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Shares in Antisense Therapeutics Limited (ASX: ANP) are tumbling today following a heavily oversubscribed placement.

At the time of writing, the Antisense share price is trading at 22 cents, down 8.33%. This means that its shares have now fallen more than 20% in the past week alone.

What’s driving Antisense shares lower?

A catalyst for today’s fall in Antisense shares is that investors may be concerned about an impending share dilution.

According to its release, Antisense advised that both institutional and sophisticated investors took part in the placement. The firm commitments received will raise $20 million for the company through the issuance of around 83.33 million ordinary shares.

The offer price will be listed at 24 cents apiece and includes one free attaching unlisted option with every 2 shares subscribed. The strike price of the exercisable option will be at a price of 48 cents for each share applied. These options will have an expiry date on the earlier of either 20 December 2024 or 20 business days after the acceleration trigger date.

The board noted that many of the company’s shareholders did not have the opportunity to participate in the offer. As such, an entitlement offer has been put forward which will enable eligible shareholders to apply for 1 new share for every 9.4 existing shares owned.

The issue price is also listed at 24 cents per new share whilst also receiving one free unlisted option for every 2 new shares issued. This is expected to raise an additional $16.8 million for the company.

Funds collected from the placement will be allocated towards covering a number of costs for the ATL1102 Phase IIb/III clinical study. The clinical trial will run for 52-weeks and will be assessed for muscle strength among a number of participants.

About the Antisense share price

It’s been a wild ride for Antisense shareholders, with the company’s shares accelerating by almost 80% year to date. Looking at a longer time frame, the Antisense share price is up around 140% since this time last year.

Based on today’s price, Antisense presides a market capitalisation of around $137.87 million, with approximately 574 million shares outstanding.

The post Antisense Therapeutics (ASX:ANP) share price tumbles 6% amid capital raise appeared first on The Motley Fool Australia.

More reading

• Here’s why the Antisense Therapeutics (ASX:ANP) share price has plummeted 19% on Monday

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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 Bruce Jackson.

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The ASX is readying itself to welcome a new face today. Shares in Green Technology Metals Limited (ASX: GT1) are set to hit the market at midday AEDT.

The lithium explorer and developer is focused on its lithium-prospective Seymour Lake Project, Root Lake Project, and Wisa Lake Project. All the company’s projects are prospective for lithium and located in Ontario, Canada.

Plenty of eyes will be on Green Technology Metals to see how its share price performs following its initial public offering (IPO).

Let’s take a closer look at what interested market watchers need to know ahead of Green Technology Metal’s float.

Green Technology shares set to debut on the ASX

The ASX’s soon-to-be newest lithium share is readying to hit the market with an expected market capitalisation of between approximately $43 million and $45 million.

That’s on the assumption it will be trading at around its offer price of 25 cents per share.

Following Green Technology Metal’s $24 million prospectus’ offer, it will have up to 197.5 million shares outstanding.

The company had hoped to raise between $20 million and 24 million through its IPO process.

The funds raised through Green Technology Metals’ float will go towards its 3 lithium-prospective projects and their exploration. The raised funds will also help pay the offer’s costs and provide working capital.

Right now, Green Technology Metals has a 51% holding in its 3 projects. The other 49% is owned by Ardiden Ltd (ASX: ADV). The projects will be run by a joint venture between the 2 companies.

According to Ardiden, Green Technology has previously paid it $1.5 million to begin the joint venture. Additionally, as part of Green Technology’s float, it provided Ardiden with 9 million Green Technology shares and $1.75 million of cash.

The company now has 12 months to provide Ardiden with another $3.5 million with either cash or scrip. If it provides both tranches of shares and cash considerations, it will earn another 29% of the projects. Thus, Green Technology has the option to earn an 80% hold in its Seymour, Root, and Wisa projects.

The post Green Technology Metals (ASX:GT1) shares are about to hit the market. Here’s what you should know appeared first on The Motley Fool Australia.

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• Antisense Therapeutics (ASX:ANP) share price tumbles 6% amid capital raise
• BetaShares Crypto Innovators ETF (ASX:CRYP) breaks opening day records…now what?
• Why the Link (ASX:LNK) share price is surging 12% higher today
• 5 ASX shares in an obscure but booming sector
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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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 Bruce Jackson.

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The BetaShares Crypto Innovators ETF (ASX: CRYP) didn’t disappoint on its first day of trading yesterday.

In fact, it saw a record amount of trades within minutes of the opening bell. And strong investor demand kept that going through the day.

We’ll get to those figures in a tick.

But first…

What does the ASX crypto ETF invest in?

The exchange-traded fund (ETF) is the first to give Aussie investors exposure to a range of crypto-related assets via the ASX.

But BetaShares Crypto Innovators ETF doesn’t invest directly in cryptocurrencies like Bitcoin (CRYTPO: BTC) or Ethereum (CRYPTO: ETH).

Instead, it offers investors exposure to a range of crypto mining and blockchain-related companies.

BetaShares’ website says its crypto ETF will hold up to 50 such assets. Currently it lists 32.

Its top holdings, as of this morning, are:

• Silvergate Capital Corp (12.3%),
• Marathon Digital Holdings Inc (12.1%),
• Galaxy Digital Holdings Ltd (11.6%), and
• Coinbase Global Inc (10.1%).

As we cautioned yesterday, investing in this crypto ETF isn’t for everyone.

As with the high volatility witnessed with crypto prices, so too can investors expect some big ups and downs among the companies that are closely tied to these cryptos’ performances. BetaShares cautions on its website that, “CRYP should be considered very high risk”.

What records did the ETF set, and what’s next?

Just 15 minutes after trade opened yesterday, the first ASX crypto ETF saw $8 million worth of trades.

That broke the previous record for first-day volume, set by the Hyperion Global Growth Companies (ASX: HYGG) fund in March this year.

The crypto ETF ended the day with net buys of $39.7 million.

BetaShares CEO Alex Vynokur said:

Investor demand for exposure to the digital assets theme is considerable as evidenced by the record investor interest in the BetaShares Crypto Innovators ETF. Following the successful launch of CRYP, we are looking forward to building out a range of ETFs providing Australian investors a broad range of exposures to the digital assets ecosystem, including the expected launch of the 1BTC and 1ETH ETFs, which will provide access to the performance of the spot prices of Bitcoin and Ethereum.

While ASX investors will need to wait a while yet for a Bitcoin or Ethereum ETF, clearly there’s plenty of appetite for the newly launched fund.

The post BetaShares Crypto Innovators ETF (ASX:CRYP) breaks opening day records…now what? appeared first on The Motley Fool Australia.

More reading

• Why the Link (ASX:LNK) share price is surging 12% higher today
• 5 ASX shares in an obscure but booming sector
• Christmas is coming, but is the Coles (ASX:COL) share price already overstuffed?
• Own ASX BNPL shares? These were the best performers during October
• Why Nvidia stock rocketed higher on Thursday

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. 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 Bruce Jackson.

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The Link Administration Holdings Ltd (ASX: LNK) share price is surging higher on Friday and is the best performer on the S&P/ASX 200 Index (ASX: XJO) by some distance.

In morning trade, the administration services company’s shares are up 12% to $4.87.

Why is the Link share price surging higher?

Investors have been bidding the Link share price higher today after it received a takeover approach from private equity firm, Carlyle Group.

The private equity firm, courtesy of its Carlyle Asia Partners business, has tabled a conditional, non-binding indicative proposal to acquire Link for $5.38 per share. This comprises $3.00 cash per share and a pro rata distribution of Link’s shareholding in PEXA Group Limited (ASX: PXA) valued at $2.38 per share.

Link owns a 42.77% stake in digital property settlement platform provider, PEXA.

And while today’s offer represents a premium of 24.2% to the Link share price at Thursday’s close, it is lower than previous takeover proposals.

For example, this isn’t the first time that Carlyle has made a play for Link. The private equity firm was part of a consortium aiming to acquire the company for $5.40 per share last year. It eventually withdrew its offer after SS&C Technology made a higher offer of $5.65 per share.

In addition, it is worth noting that Link has since bought back ~$101.7 million worth of its shares as part of a $150 million buyback program. That buyback has now been suspended following the Carlyle approach.

What’s next?

The Link Board advised that it intends to consider the proposal but no due diligence has been granted to Carlyle as of yet.

It also notes that the proposal remains subject to a number of conditions and has warned shareholders not to take action in relation to the proposal.

Judging by how far away from the offer price the Link share price is trading today, it appears as though the market has a few doubts that a deal will be ultimately done.

The post Why the Link (ASX:LNK) share price is surging 12% higher today 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. owns shares of and has recommended Link Administration Holdings Ltd. 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 Bruce Jackson.

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