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Tyro Payments (ASX: TYR) has today rejected a revised $875 million takeover offer from a consortium led by private equity firm Potentia Capital, despite major shareholder Grok Ventures continuing to back the suitor’s bids.
The consortium, which comprises HarbourVest Partners, MLC Investment and The Construction and Building Unions Superannuation Fund, increased its bid to $1.60 per share, reflecting a 26 per cent jump on the $1.27 offer it proposed three months ago.
However, the Tyro board said the deal “continues to significantly undervalue” the company and as a result is not in the best interests of shareholders.
In September, an initial $660 million proposal was backed by major shareholder Grok Ventures, the private investment vehicle of Atlassian co-founder Mike Cannon-Brookes and his wife Annie, which owns 12.5 per cent of Tyro.
In light of the revised bid, Grok has agreed it “cannot take any action under a competing proposal, unless that competing proposal has a value of $1.85 per share or greater”. The agreement will continue to be in force until 7 March 2023 and may extend up to 7 June 2023.
Under the proposed deal, shareholders will have the option to receive their consideration in the form of 100 per cent cash; 50 per cent cash and 50 per cent scrip; or 100 per cent scrip in a privatised Tyro.
Meanwhile, the potential of a buy-out from Westpac (ASX: WBC) has also come to a close after the banking giant announced today that submitting an offer was not in the best interests of its shareholders at this time.
On October 18, Tyro confirmed it had received approaches from several parties expressing interest in a potential change of control transaction, including Westpac.
“The board has determined that the company will cease all current discussions with these parties in relation to a possible change of control transaction, as those discussions have not resulted in a proposal that the board believes fairly values Tyro,” Tyro said to shareholders today.
“Tyro remains open to engaging with any credible change of control proposal it receives that represents compelling value for Tyro shareholders.
“Based on the board’s assessment of the company’s attractive growth prospects in the Australian payments and business banking markets, no such proposal has been received, and accordingly the board and management will continue to focus on executing on Tyro's current strategy.”
The board also noted that the revised offer comes at a time of significant share market volatility and cyclical weakness in global technology and payment company valuations, with Tyro’s share price trading as high as $2.92 each within the past 12 months.
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