Archer, HarbourVest offer rejected

Australian software company MYOB has rejected the consortium's A$437m offer, saying it represents an 'unusually skinny' premium.

Australian software company MYOB has recommended that its shareholders reject the offer put forth by Archer Capital and HarbourVest Partners to take the company private, saying that “it is inadequate and undervalues MYOB’s existing business and future prospects”.

The company’s directors, who hold a total of 29 percent of its issued capital, have said that they intend to reject the offer. 

Last month, the Australian private equity firm and the Boston-based alternatives firm offered to delist MYOB for approximately A$437 million ($293 million) by offering A$1.12 per share. The original offer was of $A1.15 per share to be upped to $A1.25 per share if shareholder acceptance reached 90 percent or more. However, the Archer consortium brought the offer down to A$1.12 per share following a 12.85 cents capital return paid by MYOB to its shareholders.

MYOB said in a statement that it is in discussion with other parties with regards to alternative proposals. It is also still in talks with the Manhattan Software consortium which comprises Archer Capital and HarbourVest.

“Manhattan is seeking to take advantage of the unprecedented volatility in global markets by acquiring MYOB without paying fair value to shareholders,” said Simon McKeon, chairman of MYOB. “The offer represents an unusually skinny premium and is low relative to comparable trading multiples.”

An MYOB-sanctioned valuation of the company found MYOB shares worth in the range of A$1.16 to A$1.29 per share, the company said. The consortium’s offer falls below that range.

This is the second time that Archer has tried to de-list MYOB. Its first offer of A$1.90 a share was also rejected by the company in May this year. MYOB shares were last trading at A$0.965.

Archer did not respond to a request for comment.