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A major shareholder in business management company MYOB (ASX: MYO) has gone public with its refusal to back the $2.2 billion takeover proposal by a private equity firm.
In a letter sent to MYOB and ASIC, and posted on the ASX today by MYOB, major shareholder Manikay Partners has expressed its disagreement with the proposed takeover of MYOB by Kohlberg Kravis Roberts & Co (KKR).
MYOB opened its books to KKR back in November 2018 ahead of the proposed $2.2 billion takeover. The private equity firm, which already owns a 20 per cent stake in MYOB, announced its takeover proposal in early October 2018.
Manikay, which owns a 9.99 per cent stake in MYOB, says the MYOB board should reconsider its recommendation of the proposal to shareholders.
"We believe this deal significant undervalues the company," says Manikay.
"We strongly believe that, given the change in market conditions since the scheme was agreed, among other things, the board's recommendation to vote in favour of the scheme cannot be supported and should not be maintained."
"The scheme followed a previous unsolicited and conditional offer by KKR at a price per share of $3.77. We were disappointed when KKR made its original offer and expected the Board would be able to negotiate a higher price that would reflect the true value of the Company. Instead, KKR took advantage of the temporary adverse market conditions in late 2018 to pressure the Board to accept a deal at $3.40 per share, a material reduction from the original $3.77 per share offer."
"Since then, equity markets have rallied significantly, and the financing markets have normalized, such that a sale of the company at $3.40 per share does not represent a fair and reasonable deal for company shareholders."
"Our valuation of the company, which we are happy to discuss with the board and with our fellow shareholders, is well in excess of $4 per share."
Responding to Manikay's letter the MYOB board says that it continues to unanimously recommend KKR's proposal.
MYOB shareholders will be given an opportunity to vote on the proposal on 17 April 2019.
Shares in MYOB are down 0.44 per cent to $3.38 per share at 12.08pm AEDT.
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