Prospective MYOB buyer drops offer price

KKR & Co has gone in AU$0.40 per share cheaper than its initial offer.
Written by Asha Barbaschow, Contributor

Private equity firm KKR & Co in October made Australian accounting software firm MYOB an offer to scoop it up for AU$3.70 per share, which would see the former spend around AU$1.75 billion to acquire the remaining securities it doesn't already own.

The offer was revised in early November, with KKR upping the bid to AU$3.77 per share.

However, on Thursday, MYOB went public with yet another revised offer from KKR, in which the firm dropped its offer by AU$0.37 per share to AU$3.40.

The revised proposal, MYOB said, is subject to the finalisation of a scheme implementation agreement and expires at 5pm Friday December 21, 2018.

MYOB's board is not overly enthused by the offer, informing KKR that it is not in a position to recommend the revised proposal. The board, however, remains in discussions with KKR regarding its proposal, MYOB explained.

"At all times KKR has indicated its support of management and the strategic growth plan currently underway," MYOB wrote in a statement to shareholders.

KKR announced its intentions to acquire MYOB on the same day it upped its stake in the company to 19.9 percent, after purchasing just under 104 million MYOB shares from Bain Capital for AU$3.15 per share -- approximately AU$327 million.

Bain Capital now has a 6.1 percent interest.

MYOB returned to public trading in 2015, after raising AU$833 million for its IPO.

Bain Capital bought MYOB for $1.3 billion in 2011 from Australia's Archer Capital and other shareholders. After returning the accounting firm to the ASX, Bain Capital retained a controlling 57 percent stake.

MYOB earlier this year announced its intention to acquire Reckon's Accountants Group for AU$180 million.

But MYOB in May pulled the pin on the deal, saying it was not prepared for the long regulatory process that would take place if the acquisition went ahead.

For the 2017 fiscal year, MYOB reported AU$60.7 million in after-tax profit, a 16.3 percent increase over its 2016 figure.

Revenue for the 12 months to December 31, 2017 was AU$416.5 million, while underlying earnings before interest, taxation, depreciation, and amortisation (EBITDA) totalled AU$190 million.


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