Dye & Durham Ltd, a legal and business software company, experienced a significant drop in its shares, falling as much as 13% after Canada’s Competition Bureau launched an investigation into alleged anti-competitive behavior. The focus of the probe is on the company’s conveyancing software used in residential real estate transactions.
The court order obtained by the Competition Bureau allows them to compel Dye & Durham to produce records and has also invited market stakeholders to submit information related to the investigation. Dye & Durham stated that they are fully cooperating with the investigation, emphasizing that it does not restrict their business operations. The company also highlighted that the software industry is highly competitive and subject to regular disruptions.
Despite the ongoing investigation, Dye & Durham has been considering various options, including a potential sale or other transactions. The company has hired Goldman Sachs Group Inc. to explore interest from potential bidders, including US-based private equity firms and strategic suitors. Additionally, activist investor Engine Capital LP, which holds about 7.1% of the company’s shares, has nominated six candidates to its board in an effort to increase its valuation.
The news of the investigation and the subsequent drop in share prices have raised concerns among investors and market analysts. Dye & Durham’s market capitalization decreased by C$141 million, leaving it with a valuation of C$1.18 billion. Despite the recent challenges, the company’s shares have shown a 20% increase year-to-date, trading at C$17.25 at the time of the report.
The impact of the Competition Bureau’s investigation on Dye & Durham’s future prospects and potential deals remains uncertain. The company’s response to the allegations and its cooperation with the authorities will play a crucial role in determining the outcome of the probe. Investors and stakeholders will be closely monitoring the developments in this case to assess the implications for Dye & Durham’s business operations and market position.
