Thursday, February 7, 2008

MYOB Rejects Private Equity Offer - What's Next?

The MYOB board's rejection of a recent private equity approach is predictable if nothing else. This is how the game is played. Regardless of whether MYOB really is receptive to a private equity deal, the first approach was always going to be denied.

The interesting thing now is the watch how the Australian stock market reacts. The share price jumped today on the news as you would expect but does the market believe that MYOB is up for sale? As I mentioned in MYOB Rejects Private Equity Offer, the company's founder - Craig Winkler - will have the last say in any deal, whether by entering into a partnership or by selling outright.

Taking MYOB private would give the company to pursue more aggressive (read risky) growth strategies than a public structure might allow. Not having the stock market looking over your shoulder gives you more time to concentrate on the task at hand.

I will be following the MYOB private equity approach closely over the next days and weeks.