Bankers have stepped up efforts to end headless chook Tyro Payments’ 2½ year stint on the ASX-boards, pitching the business as a turnaround play to private equity funds.
PE types reckon Tyro Payments has featured prominently in banker pitchbooks since its shares dipped below $2 in February, and news that thecompany was losing CEO Robbie Cookemeant it’s only a matter of time before someone may be tempted to have a nibble.
The problem now is that Tyro Payments is so bombed out - it closed at a record low 60¢ on Friday, down 80 per cent this year and now out of the S&P/ASX200 - that trying to close the bid/offer spread between buyer and board could be nearly impossible. Boards tend to focus on six and 12 month numbers, while bidders see spot prices.
While there’s a handful of big investment banks pitching the idea, sponsors are waiting to see whether Tyro Payments gets in on the action. Finding a suitor would be one way to solve the search for a new managing director. Cooke’s leaving to oversee casino operator The Star Entertainment Group.
The whole situation plays out as investors - public and private market types - have been reluctant to delve into Tyro Payments for fear of rising interest rates, a softening economy and what the combination of both could do to the health of Australian consumers. There’s also the wider market sell-off in fintech and payments groups, which has savaged valuations across the sector.
So far, transaction values through Tyro Payments’ terminals have been immune to rate rises, with FY22 numbers up about 30 per cent on last year.
Tyro Payments counts Mike Cannon-Brookes’ Grokco Pty Ltd as an anchor investor with a 13.7 per cent stake, while Fidelity sits on about 6 per cent. Other substantial shareholders from its first year as a listed company - TDM Growth Partners, Tiger Global, Danita Lowes, have sold down.
(20min delay)