Private equity firm makes takeover bid for MYOB

A consortium led by private equity firm Archer Capital has made a hostile takeover bid for Australian financial software giant MYOB.

A consortium led by private equity firm Archer Capital has made a hostile takeover bid for Australian financial software giant MYOB.

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.

Archer Capital partner and Manhattan director Andrew Gray says the offer is attractive to MYOB shareholders, particularly as it hands them cash in very uncertain economic times.

Manhattan has already talked with many of MYOB’s biggest shareholders and appears very confident the bid will succeed.

“The appeal of this cash offer is clearly evident given 48% of non-board member shareholders have already indicated that they will accept Manhattan Software’s offer as soon as it is open,” Gray said in a statement.

Manhattan said MYOB’s institutional shareholders – Sir Ron Brierley’s Guinness Peat Group Australia, Colonial First State and Octavian Special Master Fund /LP – had indicated they would accept the offer.

Schroders Investment Management, MYOB’s other significant institutional shareholder, has said it also intends to accept Manhattan’s offer once the price hits $1.25.

Manhattan also says it has secured underwritten debt financing commitments to fund the deal.

The institutional investor support for the takeover bid could indicate some dissatisfaction with MYOB and its management. In February the company rejected a takeover bid from an unnamed private equity firm that would have valued MYOB at around $1.90 a share.

The company’s shares have since fallen around 20%.

MYOB is yet to release any response to the bid.

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