ANZ share price drops amid MYOB takeover talks

The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price is trading lower on Wednesday morning.

At the time of writing, the ANZ share price is down 1% to $22.47. This compares to modest declines by the rest of the big four banks.

Why is the ANZ share price falling?

Investors have been selling down the ANZ share price this morning after the bank finally confirmed speculation that it is interested in making a major software acquisition.

According to the release, the banking giant is currently in discussions with private equity firm Kohlberg Kravis Roberts & Co. (KKR) about a potential acquisition of MYOB.

MYOB is a leading business platform provider taking on QuickBooks and Xero Limited (ASX: XRO). It delivers end-to-end business and accounting solutions direct to businesses employing between 0 and 1000 employees, alongside a network of accountants, bookkeepers and consultants.

Based on the ANZ share price performance, it appears as though not everyone is convinced that this is the right move by the bank.

What’s the latest?

The release reveals that discussions between ANZ and KKR are ongoing and the parties have yet to reach an agreement in relation to the acquisition. In light of this, the bank has warned that there is no certainty it will proceed.

However, should the transaction proceed, it would be subject to regulatory approvals. This includes approvals from the Australian Competition and Consumer Commission (ACCC) and the New Zealand Overseas Investments Office.

ANZ advised that it will make an announcement to the market if the negotiations are successfully completed and an agreement is entered into.

How much would ANZ pay for MYOB?

No details have been provided in respect to a potential acquisition price. However, it is worth noting that KKR paid $2.4 billion to acquire MYOB in 2019. So, it certainly won’t be small acquisition.

Furthermore, Xero has a market capitalisation of $12.75 billion on revenue of ~A$1 billion during the 12 months to 31 March.

MYOB reported revenue of approximately $500 million for calendar year 2021.

The post ANZ share price drops amid MYOB takeover talks appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. 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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