Tyro Payments Limited (ASX:TYR) shares dropped by nearly 20% on May 22, 2023 after it said private equity firm Potentia Capital Pty. Ltd. does not intend to proceed with a buyout proposal. Potentia had first offered to buy Tyro for AUD 1.27 per share in September, then improved its offer to AUD 1.60 in December which valued the Australian company at AUD 875 million.
Tyro rejected both offers, saying they undervalued the company, but in January granted Potentia due diligence to consider tabling a higher offer. Tyro's shares were down as much as 19.9% to AUD 1.23 in early trade May 22, 2023 after it said Potentia had walked away. Potentia's decision to withdraw the offer follows Tyro granting it due diligence and engaging in "extensive negotiation" of material commercial terms, Tyro said in a statement.
"Tyro also worked with Potentia to develop processes that could potentially address regulatory requirements to reduce risk to Tyro by providing increased confidence of completion in a reasonable timeframe," it added. In January, Tyro opened the door to re-engaging with Potentia by offering it access to its books to come up with an improved proposal and confirm the necessary funding commitments. Tyro said on May 22, 2023 it was "disappointed" that Potentia was ultimately unable to deliver a revised offer, adding that the company's prospects remain strong.
Potentia did not immediately respond to a Reuters' request for comment.