The MYOB board has agreed to recommend a “scheme of arrangement” to shareholders with US private equity giant KKR at $3.40 cash per share.
KKR’s original offer was $3.77, which it revised down after completing its due diligence and finalisation of debt funding commitments.
The recommendation is subject to an independent expert concluding the transaction is in the best interests of shareholders.
Further, MYOB is free to solicit competing proposals until 22 February 2019 under a “go shop” agreement.
Subject to shareholder approval and the other conditions, the scheme is expected to be implemented on 3 May next year.
In agreeing to the scheme, MYOB directors considered the “significant” investment needed in the short term to execute the company’s strategic growth plan.
Further, the potentially disruptive impact of a failed transaction on MYOB and its share price - given KKR already holds 19.9 per cent stake - was taken into account.
MYOB directors also noted the appeal of the scheme given volatile market conditions, including share price declines of about 10 per cent and 17 per cent across the ASX and domestic technology companies respectively.
KKR launched its original takoever bid in October this year.
More to come