The Tyro Payments Ltd (ASX: TYR) share price has dropped around 20% after the potential buyer walked away.
Tyro is a payment processor, with over 66,000 merchants currently using the business, with payment terminals being a key being of the business offering.
Bidder walks away
Potentia Capital Management was the entity that was interested in buying Tyro. It was considering buying the payments ASX share.
Tyro had been working with Potentia to conclude a proposal, but Potentia has said it doesn’t intend to buy Tyro any more. Discussions with Potentia have now ceased.
The Tyro Chair Fiona Pak-Poy said:
The board and management team have worked with commitment and in good faith to facilitate a potential change of control transaction to be put to our shareholders for consideration. We have appreciated Potentia’s engagement and are disappointed that they were ultimately unable to deliver a revised offer.
While these have been long and drawn-out discussions, the refreshed leadership team under Jon Davey has continued to deliver substantial operational achievements, including launching Tyro Pro, Tyro Go and Tyro BYO (Tap to Pay on iPhone). These performance outcomes have strengthened the financial and market position of Tyro as we deliver our clear strategic roadmap.
The board and management are confident and excited about the Company’s outlook and the opportunities to deliver value for our customers and shareholders.
Is the Tyro share price attractive?
Tyro said that its prospects “remain strong, as highlighted in Tyro’s most recent FY23 guidance” on 15 May 2023.
Tyro said that its gross profit guidance was upgraded to a range of $192 million to $194 million and EBITDA (EBITDA explained) guidance was upgraded to a range of between $41 million to $43 million.
It also announced last week that it now offers ‘tap to pay’ on iPhones to accept contactless payments.
I think that more payments are going to go digital, so there could be growth for the industry. But, I’m not sure if Tyro will be the one to ultimate win considering it has ceded some ground Apple. To become a lot more profitable, Tyro needs as much volume as it can get.
It could still do very well, but there are other ASX growth shares I’d rather buy which face less intense competition.
