MYOB Group share price rockets 13% higher after board recommends KKR takeover

The MYOB Group Ltd (ASX:MYO) share price has surged higher after its board recommended the KKR takeover offer…

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

a woman

The MYOB Group Ltd (ASX: MYO) share price has bounced back from a heavy decline last week and is notably higher in morning trade.

At the time of writing the accounting software company's shares are up 13.5% to $3.26.

Why is the MYOB share price storming higher?

Last week the MYOB share price was one of the worst performers on the ASX after it advised that private equity firm KKR had revised its takeover offer.

After completing its due diligence and finalising its debt funding commitments, KKR reduced its offer down approximately 10% from $3.77 per share to $3.40 per share.

The market appeared to be concerned that MYOB wouldn't agree to a deal at this level and investors sold its shares down to reflect these doubts.

However, this morning the company announced that it has entered into a Scheme Implementation Agreement under which KKR will acquire all shares in MYOB it does not already own by way of scheme of arrangement.

As part of the agreement, MYOB has agreed 'go shop' provisions that allow it to solicit competing proposals until February 22. This also includes a commitment from KKR to sell its shareholding into, or vote in favour of, any qualifying superior proposal. No break fee will be triggered in relation to the recommendation and acceptance of any superior proposal.

What now?

The directors of MYOB have unanimously recommended that shareholders vote in favour of the transaction in the absence of a superior proposal and subject to an independent expert concluding the transaction is in the best interests of shareholders.

Subject to those qualifications, each MYOB director has advised that they intend to vote all shares held or controlled by them in favour of the scheme.

Should you invest?

With its shares rising strongly today, I think MYOB's shares are fully valued now.

And while there is always a small chance that a superior proposal could be made, I wouldn't invest in its shares in the hope that this is the case.

Instead, I would suggest investors take a look at rival Xero Limited (ASX: XRO) or fintech peer Bravura Solutions Ltd (ASX: BVS).

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Bravura Solutions Ltd and Xero. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Mergers & Acquisitions

Two lab workers fist pump each other.
Mergers & Acquisitions

Why are Mesoblast shares jumping 8% today?

The biotech star has announced an exciting acquisition on Wednesday.

Read more »

Coal miner standing in a coal mine.
Energy Shares

ASX 200 coal stock higher on US$2.4 billion deal

The company has agreed to pay up to US$2.4 billion for an 80% stake in a major coal mine.

Read more »

two men shake hands on a deal.
Mergers & Acquisitions

This ASX stock is locked after a major Tuesday update

This ASX payments stock is paused pending a major acquisition update...

Read more »

Two businessmen shake hands behind a window.
Mergers & Acquisitions

Why this ASX REIT is quietly pushing back toward its takeover price

Investors push National Storage higher as the final takeover steps come into view.

Read more »

Worried woman calculating domestic bills.
Mergers & Acquisitions

Challenger jumps 4%, Pepper Money sinks as takeover collapses

Bid rejected, premium gone. Here's why one stock fell while the other rallied

Read more »

Man sitting in a plane looking through a window and working on a laptop.
Mergers & Acquisitions

Flight Centre shares lift amid latest UK acquisition news

Flight Centre announced a new UK-based acquisition today.

Read more »

Worried woman calculating domestic bills.
Financial Shares

Pepper Money shares plunge 10% after Challenger slashes takeover offer

The revised proposal comes just over a month after the original takeover approach sparked a strong rally in Pepper’s share…

Read more »

Two young male miners wearing red hardhats stand inside a mine and shake hands.
Mergers & Acquisitions

Fortescue shares lifting off today amid big copper news

With copper prices up 35% in a year, Fortescue is making some strategic moves.

Read more »