MYOB Provides An Update On KKR’s Proposal: A Quick Look

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On November 2, 2018, MYOB Group Limited (ASX: MYO) made an announcement related to the proposal from the KKR. It stated that further to the announcement made earlier, it had decided to grant the access to the information to the private equity giant, but they need to enter into an agreement on certain terms which would be satisfactory to MYOB Group Limited.

Earlier, on October 8, 2018, MYOB has made an announcement regarding the Bain Capital Abacus Holdings’ decision to unload 103,951,106 shares of the company. This represents the sale of around 17.6% of the issued share capital to the private equity company named KKR’s affiliate. With this, the private equity firm had an aggregate economic interest of 19.9% in MYOB Group Limited. The private equity firm has made a proposal to MYOB which states that it plans to make an acquisition of all the shares which have not been owned by KKR. This proposal would be dealing with the number of conditions like getting the debt financing on the terms which are acceptable, due diligence completion which needs to satisfy the private equity firm as well as the execution of the transaction implementation documentation with the terms which should be acceptable to KKR. Earlier, the board of MYOB has stated that it would be updating the market participants regarding the procedures.  

MYOB Group Limited has decided to give the access so that KKR can progress with the proposal. The proposal which has been made is subject to the conditions which include the completion of the due diligence by the private equity firm. It also includes the resolution of the financing arrangements. KKR had also raised the offer price to A$3.77 per share. Post the receipt of the proposal, an independent board committee or IBC was formed the chairman of which is Justin Milne. The committee also includes Anne Ward, Fiona Pak-Poy as well as Andrew Stevens. This committee would be assessed as well as evaluating the developments with respect to the proposal of KKR.

As per the board of MYOB, there is no certainty regarding the proposal of KKR which has been made i.e. it might not result in an offer. The shareholders need to be informed that no action is required from their side at the present stage. The board of MYOB Group would be updating the shareholders as they deem appropriate. Moreover, the MYOB has also stated that they would be initiating certain actions which would be beneficial for the shareholders. For MYOB Group, the financial adviser would be UBS while Clayton Utz would be acting as the legal adviser.

At the time of writing, the share price of MYOB is trading at A$3.520 per share which reflects an intraday rise of A$0.160 per share or 4.762%. The share price of the company is trading in the higher range and it has a market capitalization of $1.99 billion. It has an annualized dividend yield of 3.42%. Over the past six months, the stock has delivered the return of 4.02%.


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