Australia’s MYOB recommends KKR’s marked-down US$1 billion buyout offer, shares rise
S Y DN EY: Aus t r a l i a n accounting software maker MYOB Group Ltd ( MYOB) said it would back a marked- down A$ 1.6 billion ( US$ 1 billion) buyout offer from privateequity giant KKR & Co ( KKR) in a bid to navigate a broader market turmoil, sending its shares higher.
The decision marks a swift change of heart for the Sydneylisted mainstay of Australian small businesses that just four days earlier suggested it could not go ahead with the US firm’s lower bid.
MYOB said in a statement on Monday it would now recommend the offer, given a 10 per cent drop in the Australian equity market since KKR first made a higher indicative bid in October, and the cost of a company restructure still underway.
“We believe it is in the best interests of shareholders to put and recommend this transaction to shareholders having regard to market uncertainty and the longerterm nature of the strategic growth plan,” chairman Justin Milne said.
KKR already owns 20 per cent of the target but would vote in favour of any higher offer that MYOB can find, MYOB said.
KKR was not immediately available for comment.
“There won’t be a better bid,” said Stuart Smith, private client adviser at Bell Potter Securities.
MYOB shares were up 15 per cent by mid- session, while the broader Australian market was f lat.
The A$ 3.29 trading price was, however, still below KKR’s latest A$ 3.40 indicative offer price, a sign of uncertainty about whether a formal offer would eventuate.
KKR initial ly suggested paying A$ 3.70 per share for MYOB then raised it to A$ 3.77, prompting the Australian firm to give KKR access to its financial records for due diligence.
But KKR later slashed the offer amid a broader sell off in global technology shares, with majors like Facebook Inc and Google owner Alphabet Inc slipping on concerns about incursions on privacy.
When MYOB went public in 2015, it sold its shares at an issue price of A$ 3.65. Still a dominant provider of account ing software in Australia, it has recent ly been struggl ing to compe te for ma rke t sha re wit h cloud- based New Zealand rival Xero Ltd. — Reuters