Technology banking solutions group Tyro Payments [ASX:TYR] has announced Westpac Banking Group has withdrawn its interest in seizing control of the group.
TYR also stated it has also closed its doors on Potentia Capital Management and several other interested parties.
Potentia Capital had just provided a new offer to TYR as a non-binding indicative proposal at $1.60 a share — $875 million in total value.
Despite the ‘unsolicited approaches received from several parties’ through September and October, Tyro had engaged in extensive discussions and has considered the offers.
Tyro’s share price plummeted 20% by the early afternoon, priced at $1.20 per share at the time of writing.
In the year so far, TYR has dropped 58% in share value.
Source: tradingview.com
Westpac pulls out of Tyro takeover, Potentia is rejected
Today Tyro has informed its shareholders that upon finalising its due diligence on the company, Westpac Banking Group has since decided an offer for TYR would not be in the best interests of its own shareholders at this time.
Potentia, on the other hand, revised its original offer of $1.27 per Tyro share (worth $694 million) to a non-binding indicative proposal offer at $1.60 for each TYR share, reaching the full value of around $875 million.
Shareholders would have had the option to consider 100% cash, 50% cash and 50% scrip, or 100% scrip in Potentia’s private unlisted investment.
However, Tyro’s Board sought consultation with financial and legal advisers and decided the new proposal ‘continues to significantly undervalue’ the company.
TYR claims the offer is not in the best interests of its shareholders and ultimately rejected the latest bid as it currently stands.
Tyro also commented on the timing and nature of the proposal by stating the following:
‘The Board further noted that the Revised Indicative Proposal 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 within the past 12 months.’
TYR to focus on strategies in absence of ‘compelling’ offers
Tyro had dismissed Potentia’s first offer as ‘highly opportunistic’ despite represented a premium of 29% to the closing price of 99 cents per share on 7 September and 29% to Tyro’s 30-day VWAP.
Potenita had also entered into a Voting and Acceptance Deed with Tyro’s largest shareholder, Cannon-Brookes Head trust (Grok), relating to Grok’s 12.5% shareholding in Tyro back in September.
Grok had reportedly agreed to the takeover bid, provided the proposed price was no less than $1.27 a share.
The Voting and Acceptance Deed now means that Grok can’t take any action under competing proposals unless the proposed value is at least $1.85 a share. This agreement is understood to remain in place until 7 March 2023 and may extend up to 7 June 2023.
Tyro also included an update confirming that it is presently tracking towards the top end of guidance for all operating metrics and is also making good progress in executing its strategic priorities for FY23.
The group stated it remains open to any ‘credible change of control proposals’ that may come its way, provided they represent a more compelling valuation of the company for its shareholders.
In the meantime, TYR is intent on focusing on the execution of its current strategies.
Exciting fintech stocks for 2023
2022 was tough for many fintechs, with profitability seeming like a far-fetched dream.
Many fintechs suffered from overconfidence in the ‘growth-at-all-costs’ business model that caught them off guard when the markets turned.
Growing and profiting was not a commonly harmonious partnership.
But with the right choices, some fintechs can grow into very sturdy, lucrative businesses.
Our market expert, Ryan Clarkson-Ledward, has done the necessary research required for discerning these.
He’s discovered three profitable fintech stocks flying under the radar. One of them, he says, is a start-up ‘wrestling with the big banks — and winning’.
Click here for the free report.
Kind regards,
Mahlia Stewart,
For Money Morning
