The board of MYOB has finally agreed to recommend the takeover bid of private equity group Manhattan Software Bidco, after the raider agreed to increase its bid.
Manhattan has lifted its base bid from $1.02 a share to $1.05; this will rise to $1.16 a share if Manhattan can move to compulsory acquisition.
While recommendation of the MYOB board was crucial for the bid to succeed – the board, including founder Craig Winkler, control about 30% of the company’s shares – the deal is not year over the line.
Manhattan faces a challenge to secure acceptances from 50.1% of shareholders by 18 December. The private equity raider said it has received acceptances from 34.42% of shareholders.
MYOB chairman Simon McKeon says it will be interesting to see if Manhattan can get to 50.1%. While a number of institutional shareholders have agreed to the deal, McKeon claims to know of “a bunch of other institutions who are unimpressed”.
“Now if a majority of shareholders want to sell out, then the board is saying that it will sell its share, which is about 30%,” McKeon told The Australian Financial Review.
McKeon has defended the board’s decision to recommend the bid, given it remains outside the $1.16 to $1.29 a share valuation provided by independent experts Lonergan Edwards & Associates, saying the board had tried to run an auction and get solicit other bids.
Related stories:
- Why the private equity bid for MYOB just might succeed
- MYOB tells shareholders to reject takeover bid
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