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Sydney-based point-of-sale fintech Tyro Payments (ASX: TYR) is pursuing a potential $220 million takeover bid for Smartpay Holdings (ASX: SMP), a dual-listed New Zealand company that is making inroads into the Australian payments sector.
However, Tyro could have a fight on its hands with a second undisclosed party also running the ruler over Smartpay which is described as Australia and New Zealand’s largest independent full-service EFTPOS provider.
Smartpay would only reveal today that a second “international strategic” player is also pursuing a separate deal for the company.
Tyro today announced that it has issued Smartpay with a non-binding indicative offer to acquire all of the company’s shares for NZ$1 – or 91c - each in a cash and scrip deal.
The announcement sent Smartpay shares surging more than 50 per cent at the opening today, pushing them to a high of 80c on the ASX.
Tyro says at this stage it is only in preliminary discussions with Smartpay regarding the buyout proposal.
“There is no certainty that any transaction will result, or if so on what terms,” says the company.
“Nothing in this announcement or Tyro’s proposal comprises a notice of intention to make a takeover offer for the purposes of the New Zealand Takeovers Code. Tyro will keep the market updated in accordance with its continuous disclosure obligations.”
The terms of the deal have not been finalised, including the cash consideration, although Tyro says the buyout is likely to be weighted heavily towards the issue of Tyro shares to Smartpay investors.
Meanwhile, Smartpay says that Tyro’s offer is one of two separate conditional, non-binding and indicative proposals it has received. Details of the second proposal have not been disclosed other than it is an offer to acquire 100 per cent of Smartpay’s issued capital.
“Both of the proposals are preliminary only and highly conditional, including (but not limited to), satisfactory completion of respective due diligence and execution of definitive transaction documentation,” says Smartpay.
“As part of its review of the proposals, the Smartpay board has decided to allow both Tyro the other party to conduct an initial limited period of commercial due diligence on a non-exclusive basis.
“This will allow Smartpay to better assess the relative merits of each proposal and give each party an opportunity to further improve their respective proposals based on the information received.”
Smartpay says that it plans to undertake reciprocal due diligence on Tyro as the lion’s share of the proposed buyout will comprise Tyro shares.
“The provision of limited due diligence does not guarantee that either of the proposals will result in a binding offer or one that is capable of being recommended by the Smartpay board,” says the company. “There is no certainty that any transaction will arise.”
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.
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.
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.
Shares in Smartpay were trading at 78c, up 25c at 11.37am (AEDT), while Tyro shares were up 1c to 74c.
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