The Tyro Payments Ltd (ASX: TYR) share price is up 13.8% at the time of writing, having earlier posted gains of more than 15%.
Tyro shares are currently trading for $1.37 apiece.
This comes following yesterday's 19.5% loss in the payments company's shares in the wake of apparently collapsed takeover talks with both Potentia and Westpac Banking Corp (ASX: WBC).
Image source: Getty Images
What happened with the takeover talks?
In a nutshell, the company's board rejected an improved offer from Potentia, saying its discussions had not resulted in a proposal that fairly values the Tyro share price.
Potentia had upped its initial offer to $1.60 per share. That's some 17% above the current share price and more than 33% above yesterday's closing price.
In rejecting the offer, the board noted that Tyro shares had traded at highs of $2.93 over the past 12 months.
Separately, Westpac reported it won't be submitting an offer as the bank does not believe that would be in the best interest of its own shareholders at this time.
What rumours could be sending the Tyro share price higher today?
Atop some likely bargain hunting after yesterday's sharp selldown, the Tyro share price could be getting a boost from several rumours making their rounds amongst the financial news outlets.
Chief amongst those unconfirmed rumours is that Potentia could bypass Tyro's board and go directly to the shareholders.
Those shareholders include Mike Cannon-Brookes, who owns 12.5% of Tyro shares via Grok Ventures. Cannon-Brookes is reportedly in favour of selling.
QVG Capital portfolio manager Chris Prunty said the board needed to do more to convince shareholders it had made the right call.
According to Prunty (courtesy of The Australian Financial Review):
If a board rejects a bid on valuation grounds then the onus is on the board to put a compelling case to shareholders as to the value they see. The Tyro board has not done this.
$1.60 is not a knock-out price so rejecting it isn't a sin, but with Westpac out of the race Potentia is perhaps not as far away as they were. We'll be encouraging the board to engage with any future bid. Why not let shareholders decide?
Harvest Lane's chief investment officer, Luke Cummings, believes Potentia will come back with an improved offer on the Tyro share price. He also indicated Potentia could put the offer directly to shareholders:
Hats off to them for rejecting the initial approach because they have forced Potentia to come back with a higher offer. But if I'm them [Potentia], I'm going straight to shareholders with $1.60 in the next few days to try and get 50.1 per cent and saying to the board this is our best and final offer unless we get access to due diligence.
Another unconfirmed rumour that could be impacting the Tyro share price is the potential for the payments company to launch a capital raising.
The Australian speculated on this in an article published after market close yesterday.
The paper cited Tyro's big expenses and sizeable losses over the past two financial years, along with the deep pockets of its competition, as a reason that "some believe an equity raising would be needed".
Tyro share price snapshot
Despite today's big rebound, the Tyro share price remains down 53% in 2022.
Tyro shares kicked off the year trading for $2.92 apiece.
