Tyro Payments (ASX: TYR) has today rejected a $660 million takeover offer from a consortium of private equity investors on the basis it undervalues the fintech, but major shareholder Grok Ventures could throw a spanner into the works.
As announced today, Tyro received an unsolicited bid from a consortium led by Potentia Capital to acquire 100 per cent of the payments company for $1.27 per share. In addition to Potentia, the consortium comprises HarbourVest Partners, MLC Investments and The Construction and Building Unions Superannuation Fund.
Under the offer, 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.
The Tyro board says the proposal “significantly undervalues” the company and as such is not in the best interests of shareholders as a whole.
However, 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, has backed the Potentia deal. The private equity firm says it has entered into an agreement with Grok such that the significant shareholder would accept the deal at the current offer price.
In addition, the fintech was informed by Potentia that Grok “cannot take any action under a competing proposal, unless that proposal has the value of A$0.25 per share greater than the value of the most recent Potential proposal”.
The Tyro board says shareholders do not have to take any action in relation to the proposal, noting it would only progress with such a deal if it believed it to represent “compelling value” for stakeholders.
“In coming to this decision, the board believes the indicative proposal is materially below Tyro’s fundamental value and highly opportunistic given the offer price is substantially below where Tyro’s share price has traded in the past 12 months,” the Tyro board says.
“Tyro has attractive growth prospects as it continues to take share in the Australian payments and business banking markets.”
The board also says Tyro is well funded and capitalised to support growth ambitions, and expects to achieve improving operating leverage in the medium term.
Following the announcement, shares in Tyro spiked 25.89 per cent higher to $1.24 per share.
The company’s share price is still well below its most recent peak of $4.28 per share achieved in September 2021, but double the company’s historic low of 61 cents per share on 1 July this year.
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