Payments fintech Tyro Payments [ASX:TYR] has rejected an unsolicited takeover bid from Potentia Capital Management.
The initial offer valued Tyro at about $694 million, or $1.27 per share.
TYR shares rose more than 25% on Thursday as investors eye further upgraded takeover bids.
The offer may have been too opportunistic for TYR’s management, given the Tyro stock is down 55% year to date.
Indeed, Tyro’s Board labelled the offer ‘highly opportunistic’, arguing the price is substantially below where TYR’s share price was in the past 12 months.
Source: www.tradingview.com
Offer rejected: Tyro baffled at takeover proposal
Potentia’s proposal, which it believes to be a ‘full and fair valuation’, included:
- Indicative Proposal was valuing Tyro at $1.27 per share (Offer Price) and represented an enterprise value of $693.9 million
- The Offer Price 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
- Shareholders would’ve had the option to receive their consideration in the form of either 100% cash, or 50% cash and 50% scrip, or 100% scrip in a privatised Tyro (subject to scale-back)
- The Proposal already included a Voting and Acceptance Deed with Cannon-Brookes Head Trust (Grok) in relation to its 12.5% shareholding in Tyro (with Grok being the largest Tyro shareholder, holding more than 64.7 million shares)
Tyro’s Board took the time to consider the proposal but, along with its financial and legal advisors, decided that the Indicative Proposal ‘significantly undervalued’ Tyro.
In fact, the board went so far as to say the proposal was ‘highly opportunistic’ — this comment was based on the offer price being significantly lower than Tyro’s 12-month share price average.
That, and the proposal was deemed particularly condition-heavy.
Outlook for Tyro
In rejecting the offer, Tyro’s management said the fintech has attractive growth prospects ‘as it continues to take share in the Australian payments and business banking markets’.
Furthermore, Tyro’s board expects the company to achieve stronger operating leverage in the medium term.
To this end, Tyro’s board have unanimously decided the proposal was not in the best interest of its shareholders nor for the future outlook of the company.
How can you build wealth in a bear market?
The bear market has been tough.
With the way the current climate is looking right now, it can be a challenge to keep your eyes on the end goal and believe you can succeed.
If you’ve been a little unsure about strategies that will see you snug in retirement, you might like to check out our free event, ‘The 30% Next Egg’, which is happening at 7:00pm AEST tonight.
Trading guru Murray Dawes will share his simple strategies for conservative investors who hope to boost their nest egg savings.
To learn more about the free event and register your interest, click here.
We hope to see you there.
Regards,
Kiryll Prakapenka
