MYOB rejects “opportunistic” takeover bid

Financial software giant MYOB has blasted a takeover bid from private equity firm Archer Capital as opportunistic and too low.

Financial software giant MYOB has blasted a takeover bid from private equity firm Archer Capital as opportunistic and too low.

Manhattan Software Bidco, which is made up of a group of companies managed by Archer Capital, and alternative investment firm HarbourVest Partners, has offered $1.15 cash per share for MYOB, which will increase to $1.25 a share if Manhattan gets enough MYOB shares and debt financing conditions are satisfied or waived.

It has also been revealed that Archer was the private equity firm that offered $1.90 a share for MYOB in February. Some MYOB shareholders were angry that the board rejected that bid.

But MYOB chairman Simon McKeon has advised his shareholders to do nothing before the MYOB board makes a formal recommendation.

“This appears to be an opportunistic attempt to acquire MYOB at a time of global economic uncertainty and sharemarket volatility,” McKeon said in a statement.

He argues that at $1.15 a share, the offer represents just a 5.5% premium to MYOB’s average price over the last three months. The premium rises to 14.7% if the bid rises to $1.25.

McKeon argues the company has made significant investments to strengthen MYOB’s market position in the last three years.

“MYOB is an attractive investment, especially in the current environment, and as disclosed recently by the company, MYOB’s trading performance and outlook remain strong.”

Archer appears to have done its home work and already has commitments to sell from most of MYOB’s biggest sharehoders, including Sir Ron Brierley’s Guinness Peat Group Australia, Colonial First State and Octavian Special Master Fund.

As Stephen Bartholomeusz points out today, these funds are starved for cash at the moment and the lure of Archer’s all-cash bid may be too good to refuse.

Related stories:

• Private equity firm makes takeover bid for MYOB