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Point-of-sale fintech Tyro Payments (ASX: TYR) has abandoned its $220 million takeover bid for Smartpay Holdings (ASX: SMP) in the wake of an unnamed party revising its rival offer to $271 million.
The decision by Tyro to walk away from a potential deal was prompted by Smartpay announcing last Friday that it had entered into an exclusivity arrangement with an unnamed rival bidder - even before Tyro had completed its due diligence that could have led to a higher offer.
The battle for control of Smartpay has been under way since March when Tyro first revealed its intention to buy the dual-listed New Zealand company which is making inroads into the Australian payments sector.
However, the Sydney-based Tyro says it has abandoned its ambitions for Smartpay after the company announced last Friday that the unnamed suitor, which it describes as an “international strategic", has lifted its cash offer price to NZ$1.20 (A$1.12) per share.
This compares with Tyro’s bid announced on 17 March of NZ$1, or about 91c, per share in a cash and scrip deal.
“Tyro confirms it is no longer participating in an acquisition process with Smartpay,” says Tyro in an announcement to the ASX this morning.
“Tyro submitted a proposal and was conducting due diligence as part of a competitive process.”
The company says it was informed last Friday by Smartpay of its plans to enter an exclusivity arrangement with the other party following the revised NZ$1.20 per share cash offer.
“This was prior to conclusion of the agreed due diligence process and receipt of an update to Tyro’s cash and scrip synergistic merger proposal,” says Tyro.
Smartpay informed the market on Friday that following the revised offer received from the mystery suitor it was in the best interests of shareholders to enter into an exclusivity agreement to progress the proposal to a binding transaction.
“The exclusivity agreement will provide exclusivity to the other party until Monday, 9 June,” said the company.
“Under the exclusivity arrangements, during the period from 2 May to 25 May, Smartpay has committed not to engage with any competing proposal (including a potentially superior proposal), however during the period from 26 May to 9 June Smartpay may engage with any competing proposal that is potentially a superior proposal.”
Founded in New Zealand in 1986, Smartpay originally provided payment services, including EFTPOS, to small and medium-sized businesses ahead of a New Zealand share market listing and later an ASX listing.
The company currently services more than 25,000 merchants with about 35,000 EFTPOS terminals. Tyro’s point-of-sale services are currently used by more than 73,000 merchants across Australia.
Smartpay posted an 8 per cent increase in revenue to $50.8 million in the first half of FY25, with the Australian market accounting for $41.5 million of this total – up 9 per cent from a year earlier. EBITDA of $8.8 million for the period was down from $9.6 million a year earlier.
In the first half of FY25, Tyro lifted revenue 4.7 per cent to $248.3 million, leading to a 20.6 per cent increase in EBITDA to $32.99 million.
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