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MYOB Group Ltd (ASX:MYO) shares up 19% on takeover offer at 24% premium

MYOB Group Ltd (ASX: MYO) has received a major takeover offer from private equity business KKR & Co at a 24% premium to the closing price last week.

KKR is proposing to acquire all the shares it doesn’t own for $3.70 cash per share, which is a large offer considering the closing price on 5 October 2018 was $2.98.

Prior to this offer KKR had acquired almost 104 million shares, around 17.6% of the shares, from Bain Capital at $3.15 per share. After that transaction KKR owned 19.9% of MYOB. Even after that transaction, Bain still owns 6.1% of MYOB.

Of course, there’s no guarantee that the KKR takeover offer will go ahead due to the usual conditions by such as satisfactory due diligence, obtaining debt finance and unanimous recommendation by the MYOB Board.

The MYOB Board has commenced an assessment of the proposal and will update the market when there’s something else to report. UBS has been appointed as MYOB’s financial adviser and Clayton Utz will be the legal adviser.

Foolish takeaway

On the face of it this seems like a good deal for MYOB shareholders as it’s a lot higher than the pre-offer share price and indeed higher than what MYOB has been trading at for most of its listed life.

It will be interesting to see what KKR do with MYOB as it will take heavy investment to challenge the growing Xero Limited (ASX: XRO) dominance.

If I were a MYOB shareholder I’d want to sell and put the money back to work in the share market into these top growth shares.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of 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.

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