Big delay likely on Westpac’s Tyro buy

If estpac agrees to buy Tyro, it would need to wait for approval from the Australian Competition and Consumer Commission.

There is now talk in the market that Westpac could take several more months – possibly up to a year – to buy Tyro Payments after carrying out due diligence on the Eftpos terminal payments business.

Westpac has been in a data room weighing a potential purchase of the $891m Tyro.

This column understands that another strategic group in addition to Westpac, Canada’s largest financial company Moneris, is also looking.

Yet most believe that Westpac is the most logical acquirer, with some betting it may pay about $1.75 per share.

One of the reasons for the delay is that sources say Westpac typically takes a long period of time to carry out deals.

But another is that should it agree to buy the business, it would need to wait for approval from the Australian Competition & Consumer Commission.

But in the meantime, Tyro could lose more business to rivals such as payments platform provider Block and ANZ, which has a partnership with Worldline Payment Solutions.

Yet what this could mean is that the price of Tyro becomes cheaper.

The understanding is that Westpac is buying Tyro to gain additional merchant customers in the healthcare and hospitality sector, rather than to obtain its technology.

Shares on Tuesday closed at $1.52.

Sources had earlier said that Westpac had carried out advanced work in assessing the Tyro business, which recently saw chairman David Thodey announce his resignation, and the bank’s appetite for an acquisition was strong.

Former chief executive Robbie Cooke also recently left to take on the top job at Star Entertainment.

Private equity firm Potentia Capital in September bid $1.27 per share, or $658m, for Tyro in an offer that was swiftly rejected.

Westpac is working with investment bank JPMorgan, while Jarden has been working with Potentia.

Tyro’s largest shareholder, Atlassian co-founder Mike Cannon-Brookes, agreed to deal his 12.5 per cent stake, which he owns through his private company Grok Ventures, to Potentia, backed by former MYOB boss Tim Reed and ex-Archer Capital executives.

That is if an offer above $1.52 per share does not emerge.

Shareholders bought in at $2.75 per share for the initial public offering in 2019, but some now want to cut their losses.

Tyro has about 5.1 per cent of the card payment market in Australia.