Split among Tyro directors over sweetened Potentia offer
8:00PM MARCH 12, 2023
The gradual slide in the share price of Tyro Payments since latelast month is telling, with doubts emerging that directors will support asweetened offer by Potentia Capital.
After trading at as much as $1.67 at the end of last month, Tyroshares on Friday closed at $1.49, with its market value at $771m.
Potentia has been in the Tyro data room for four weeks fromFebruary 13 and was understood to have completed its due diligence on Friday.
Sources say that it had been working up a fresh offer to put tothe eftpos payment provider’s board at the weekend, which some believe could bearound the $1.80 to $1.85 per share mark, valuing the business at as much as$961m.
A $1.85 per share offer is a 15.6 per cent premium to the lastoffer of $1.60 per share that was put on the table by Potentia and rejected byTyro.
However, some believe that there is a divided view among Tyro’sdirectors on value and some are going to continue to play hardball, with theirview on price closer to $2-plus per share.
It’s unlikely that Australia-based private equity firm Potentiawill meet those demands and so it could walk away.
However, should the board reject the offer by Potentia, thingscould then start to get really interesting.
On the shareholder registry is not only Grok Ventures, thecompany of Atlassian co-founder Mike Cannon-Brookes with 12.5 per cent, buthedge funds such as Regal that now has about 7 per cent of the stock.
Such shareholders are lobbying the board to accept a deal with aview that a bleak outlook exists for Tyro in the listed market, as spendingdemands continue to keep up with advanced technology rivals like Square.
Should key shareholders like Grok and Regal not get their way,then perhaps they will call for an extraordinary general meeting to oust theboard.
Critical for getting a deal across the line is a recommendationfrom the board to accept an upcoming approach from Potentia to persuade retailshareholders to take up the offer.
Potentia, advised by Jarden Australia, was given the four weeksof due diligence to improve its offer for Tyro, which is advised by Barrenjoey.
It first offered $1.27 per share, or $658m, for the business inSeptember.
For the six months to December, Tyro swung around from a loss inthe previous corresponding period to post a $1.1m net profit.
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