Buyout deal sparks surge in Link Shares trading.

Mitsubishi UFJ Financial Group plans to acquire Australian fintech firm Link Administration for about AUD 1.2 billion ($804.7 million) through its Mitsubishi UFJ Trust & Banking subsidiary. The deal, which is subjected to approval, is expected to close in June 2024. Under the deal, Link shareholders will get AUD 2.10 in cash and a dividend of AUD 0.16 a share, resulting in a total of AUD 2.26 a share and implying an enterprise value of AUD 2.1 billion.

Link Administration is an Australian-based fintech enterprise. The announcement of the buyout led to a jump in the company’s shares. The stock reportedly increased by 27% to AUD 2.16 after hitting a peak of AUD 2.19. Reportedly, the board of Link Administration is in favor of the buyout, provided there is no superior proposal. The company’s chairman, Michael Carapiet, stated that he believes the transaction will benefit both the shareholders and stakeholders.

The Mitsubishi UFJ Financial Group is one of Japan’s prominent banking firms. The group has signed an agreement to buy Link through a scheme of arrangement. This kind of purchase allows a company to restructure itself while being protected from creditors. It’s also seen as a less confronting way for a company to reduce its debt levels than insolvency procedures.

The deal will boost Mitsubishi’s presence in the fintech sector and augment its existing financial services offerings. This acquisition comes amid a rush by traditional banks to digitize their operations and meet the changing needs of their customers, particularly in the wake of the Covid-19 pandemic, which has accelerated the shift towards digital and contactless banking services.

As for Link, the deal could provide it with the financial backing and resources necessary to drive its growth and help it expand its offerings. The company’s stock has reportedly increased by around 9.4% this year.