News Pulse for October 11, 2018

A daily download of SME, startup, fintech and tax news from around Australia.

MYOB holders sceptics of KKR bid

The track record of private equity bids for public companies collapsing has prompted MYOB investors to become increasingly worried that the $2.2 billion offer from KKR is at risk of failing.

MYOB shares closed yesterday flat at $3.55, but the company traded in negative territory for most of the day, as arbitrage investors took a keen interest in the stock.

Xero-only firms a challenge for MYOB

A key driver of Xero’s rapidly growing cloud-based accounting software business has been the company’s focus on encouraging new accounting practices to become Xero-only businesses, according to an accounting industry expert.

This has given the company an indirect sales force that encouraged their clients to move over to Xero’s accounting software, said Dale Crosby, who advises accounting firms about technology.

Shareholders quiet but MYOB keeps gains from takeover news

Accounting software provider MYOB and its shareholders remain tight-lipped on what’s next after Monday’s takeover offer from KKR, but the company has managed to hold onto gains on the news.

The accounting software provider told investors on Monday it had received a $2.2 billion takeover offer from private equity firm KKR and Co at a price of $3.70 a share – a premium of 24 per cent on the previous Friday’s closing price.

Industry rivals Xero, Sage unlikely to make competing bids for MYOB

Accounting software provider MYOB’s legacy desktop product will act as a deterrent to any competing bids from its rivals, according to analysts who have digested private equity giant KKR’s $2.2 billion tilt for the company.

On Monday New York-based KKR made an unsolicited, non-binding $3.70 a share bid for the company. KKR made its move by first snapping up 19.9 per cent from private equity peer Bain Capital, which floated MYOB in 2015 at $3.65 a share.

Open banking’s odd bedfellows

An unusual alignment of interests between the major banks and consumer advocates over the move to an open banking regime has the potential to undermine the reforms and lead to an inferior outcome.nnThe kneejerk response is suspicion when legacy banks and consumer advocates take the same position in a policy debate.

How will Australia’s encryption bill affect the startup ecosystem? And should you be worried?

Australia’s Assistance and Access Bill 2018 — also dubbed the encryption bill — has officially been introduced into parliament and referred to the Parliamentary Joint Committee on Intelligence and Security for inquiry. But there are still concerns the bill could have serious unintended consequences — including for the startup community.nnThe bill is intended to give law enforcement access to encrypted communications they believe may contain criminal activity.

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