The Tyro Payments Ltd (ASX: TYR) share price is rocketing higher after the company knocked back an unsolicited takeover bid.
A consortium of private equity investors put forward a $1.27 per share bid for total control of the financial technology company. That represents an enterprise value of $693.9 million.
The bid was rejected by the company this morning. It said the offer significantly undervalues it.
The Tyro share price is $1.235 at the time of writing, 25.08% higher than its previous close, after touching an intraday high of $1.295. That represents a 31.47% jump.
Let's take a closer look at today's news from the payments services provider.
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Tyro share price leaps on rejected takeover bid
The Tyro share price is surging on news the company has rejected a near-$700 million takeover bid.
The offer was put forward by a consortium led by tech-focused investment firm Potentia Capital Management. The group also includes HarbourVest Partners, MLC Investments Limited, and The Construction and Building Unions Superannuation Fund.
Tyro's board slapped the $1.27 per share offer away, saying:
The indicative proposal is materially below Tyro's fundamental value and highly opportunistic given [it] is substantially below where Tyro's share price has traded in the past 12 months.
The company also said the offer is highly conditional.
On top of that, Tyro pointed out its growth prospects and its increasing share of the Australian payments and business banking markets. It also said it expects its operating leverage will strengthen in the medium term and noted it's well funded for growth.
Interestingly, the consortium secured the support of major Tyro shareholder Grok Ventures.
Readers might recognise Grok as the investment vehicle of Atlassian Corporation (NASDAQ: TEAM) co-founder Mike Cannon-Brooks. It was an integral piece of the puzzle that ultimately dismantled AGL Energy Limited (ASX: AGL)'s planned demerger.
The consortium struck a deal with Grok that would see the firm's 12.5% stake in the company voted towards its bid.
Grok will also be blocked from acting on any competing proposals unless such a proposal is at least 25 cents greater than that of the most recent bid from the consortium.
The Tyro share price fell 66% between the start of 2022 and Wednesday's close. At its current price, it's down 57% year to date.
