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(Bloomberg) — Dye & Durham Ltd shares fell as much as 13%, the most in a year, after Canada’s Competition Bureau obtained a court order to investigate alleged anti-competitive conduct at the legal and business software company.
The probe is focused on Dye & Durham’s conveyancing software used in residential real estate transactions. The court order means the Competition Bureau can now compel the company to produce records, and it also invited market stakeholders to submit information, the bureau said in a statement Thursday.
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Dye & Durham said in a separate statement that it is cooperating fully, that the investigation doesn’t restrict its business operations, and that the software industry is highly competitive and regularly disrupted.
The business also said it’s concerned the bureau may be acting on allegations from rivals “who have resisted productivity-enhancing innovation,” and that some of the regulator’s filings “improperly contextualize commercial relationships and standard software industry and data services business practices such as subscription and contract terms, discounted pricing, and product suite offerings.”
The investigation could complicate the takeover interest being fielded by the Toronto-based company. Thursday’s move erased C$141 million ($102 million) from the firm’s value at 12:21 p.m. in Toronto, leaving it with a market capitalization of C$1.18 billion.
Dye & Durham is working with advisers on a review that could include a sale or other transactions, it said last month, confirming a report by Bloomberg. It’s hired Goldman Sachs Group Inc. to field interest from possible bidders, including US-based private equity and strategic suitors.
Dye & Durham has also been targeted by activist investor Engine Capital LP, which owns about 7.1% of the firm’s shares and this week nominated six candidates to its board in an effort to boost its valuation.
Its shares traded at C$17.25 at 12:21 p.m. local time. They have gained 20% over the year to date.
—With assistance from Geoffrey Morgan.
(Updates with Dye & Durham statement and more recent share information.)
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