Major MYOB shareholder refuses to back takeover deal

Major MYOB shareholder refuses to back takeover deal

A major shareholder in business management company MYOB (ASX: MYO) has gone public with its refusal to back the $2.2 billion takeover proposal by a private equity firm.

In a letter sent to MYOB and ASIC, and posted on the ASX today by MYOB, major shareholder Manikay Partners has expressed its disagreement with the proposed takeover of MYOB by Kohlberg Kravis Roberts & Co (KKR).

MYOB opened its books to KKR back in November 2018 ahead of the proposed $2.2 billion takeover. The private equity firm, which already owns a 20 per cent stake in MYOB, announced its takeover proposal in early October 2018.

Manikay, which owns a 9.99 per cent stake in MYOB, says the MYOB board should reconsider its recommendation of the proposal to shareholders.

"We believe this deal significant undervalues the company," says Manikay.

"We strongly believe that, given the change in market conditions since the scheme was agreed, among other things, the board's recommendation to vote in favour of the scheme cannot be supported and should not be maintained."

"The scheme followed a previous unsolicited and conditional offer by KKR at a price per share of $3.77. We were disappointed when KKR made its original offer and expected the Board would be able to negotiate a higher price that would reflect the true value of the Company. Instead, KKR took advantage of the temporary adverse market conditions in late 2018 to pressure the Board to accept a deal at $3.40 per share, a material reduction from the original $3.77 per share offer."

"Since then, equity markets have rallied significantly, and the financing markets have normalized, such that a sale of the company at $3.40 per share does not represent a fair and reasonable deal for company shareholders."

"Our valuation of the company, which we are happy to discuss with the board and with our fellow shareholders, is well in excess of $4 per share."

Responding to Manikay's letter the MYOB board says that it continues to unanimously recommend KKR's proposal.

MYOB shareholders will be given an opportunity to vote on the proposal on 17 April 2019.

Shares in MYOB are down 0.44 per cent to $3.38 per share at 12.08pm AEDT.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Enjoyed this article?

Don't miss out on the knowledge and insights to be gained from our daily news and features.

Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.

Support independent journalism and stay informed with stories that matter to you.

Subscribe now and get 50% off your first year!

Four time-saving tips for automating your investment portfolio
Partner Content
In today's fast-paced investment landscape, time is a valuable commodity. Fortunately, w...
Etoro
Advertisement

Related Stories

“Not our desired outcome”: Telix withdraws from $300m Nasdaq IPO

“Not our desired outcome”: Telix withdraws from $300m Nasdaq IPO

Telix Pharmaceuticals (ASX: TLX), one of the nation’s largest...

CommBank joins new ‘intelligence loop’ to combat SMS phishing scams

CommBank joins new ‘intelligence loop’ to combat SMS phishing scams

In an effort to reduce the number of SMS phishing scam victims...

Stralis Aircraft secures funding to make commercial hydrogen planes a reality

Stralis Aircraft secures funding to make commercial hydrogen planes a reality

Brisbane-based Stralis Aircraft has become one step closer to its a...

A year after the PwC scandal, the furore is gone – as well as the appetite for structural change

A year after the PwC scandal, the furore is gone – as well as the appetite for structural change

It was a scandal that rocked the shaky foundations of Australia&rsq...