Potentia lobbies Tyro Payments shareholders after initial bid rebuffed

Potentia Capital has been trying to convince Tyro Payments shareholders to accept its $658m takeover bid.

Australian private equity firm Potentia Capital has been trying to convince Tyro Payments shareholders to accept its $658m takeover bid.

The $1.27 per share offer last week was rebuffed by the Tyro’s David Thodey-led board.

But the largest shareholder, Atlassian co-founder Mike Cannon-Brookes, has agreed to deal his 12.5 per cent stake, which he owns through his private company Grok Ventures, if there is no offer above $1.52 per share.

The suggestion is he wants to be a co-owner with Potentia and its backers if no other bid arrives.

Only time will tell whether other shareholders accept the deal, but most believe it is unlikely, given Tyro’s swift rejection and the fact that analysts at Morgan Stanley believe an offer of between $2 and $2.50 per share is the going rate for similar companies.

Shareholders bought at $2.75 per share in the initial public offering in 2019.

With interest rates rising, there’s a focus on funding when it comes to Potentia’s bids for not only Tyro but Nitro Software.

Potentia put forward an offer worth about $386m for Nitro Software in the past fortnight but was swiftly rebuffed.

Through its $1.58 per share bid, advised by Jarden, it gained a 17 per cent stake, with help from HarbourVest. They now own 19.9 per cent. Nitro’s share price closed at $1.67 on Friday.

Potentia said in a shareholder notice at the time of the bid that, subject to any adjustment agreed between the parties, if the proposed transaction was successfully completed, Potentia and the co-investor (HarbourVest) would each commit to paying 25 per cent of the equity amount of the buyout proposal.

It said the parties acknowledged that the remaining equity amount may be allocated by Potentia at Potentia’s sole discretion.

A Potentia spokesman said its offers for both companies were fully funded.

Nitro, which makes PDF software and is advised by UBS, called the offer “highly opportunistic”.

It was an 18 per cent discount to Nitro’s 12-month volume-weighted average price of $1.93 per share. Shares were trading around $1.13 at the time of the Nitro offer.

Meanwhile, another software company, Nuix, is hunting for a defence adviser, as reported by DataRoom on Friday.

There is talk it has received buyout approaches, including one from the Barrenjoey-advised US business Reveal.