This was published 5 years ago
Shareholders give MYOB takeover the green light
By Emma Koehn
Small business accounting firm MYOB looks set to pass into private equity ownership after shareholders gave a green light to a $1.6 billion takeover offer from KKR on Wednesday afternoon.
Seventy-three per cent of eligible shareholders voted on whether to sell their shares for $3.40 each, with 82 per cent of votes cast in favour and 17 per cent against.
MYOB boss Tim Reed will go with his company into private equity hands following Wednesday's shareholder meeting. Credit: Jessica Hromas
At least 75 per cent of the votes cast were needed to approve the deal, which was first made in October at $3.70 a share, later revised down to $3.40.
The lead-up to the vote has been colourful, with major shareholder Manikay Partners opposing the deal on the basis it undervalued the company. Earlier this month it confirmed it would vote in favour of the proposal but was critical of the company and its chairman Justin Milne, saying their support of the deal showed they were not on the same page about the future of the company.
Mr Milne welcomed the vote in a statement on Wednesday afternoon, saying it showed shareholders agreed with the board that the offer was in the best interests of shareholders.
"MYOB is a great Australian company and the board has every confidence it will continue to thrive under the care of its new owners.
Accounting technology consultant Dale Crosby says while having the takeover resolved would ultimately be good news for MYOB, he believes the company is still in for a challenging long term battle with Xero and Intuit for small business customers.
"There’s no question they’ve got a very strong traditional base of small business clients and that will continue. That’s an ongoing revenue stream, the challenge is growing that."
Newly started micro businesses may be more likely to "gravitate" towards Xero and Intuit's offerings in part because of the more targeted promotions those companies have been doing, Mr Crosby said.
MYOB has long outlined its three key business segments as small business accounting, enterprise products and a newly acquired payments system.
The payments and invoicing software saw the strongest revenue growth in the past year but still only accounts for a few per cent of the company's income.
"MYOB very much has to do this in order to stay in touch," Mr Crosby said.
The accounting firm's share price has hovered around the $3.40 takeover price offer all week and was sitting at 1c below at $3.39 at market close on Wednesday.
The company floated in 2015 in an $833 million initial public offer with an offer price of $3.65 per share.