Struggling Jarden banks on Potentia-Tyro deal

Tyro earlier rejected Potentia’s $1.60 per share offer, but sources believe it has now agreed to pay more than $1.70 for the $820m business.

Jarden will be hoping its client Potentia finally secures a deal to buy the $820m Tyro Payments this week after reassuring staff it remains in a strong position in the market.

Sources last week said they believed Tyro and its private equity suitor had agreed a price but were ironing out the final details.

Jarden Australia is advising Potentia, while Tyro is advised by Barrenjoey.

Tyro earlier rejected Potentia’s $1.60 per share offer, but sources believe it has now agreed to pay more than $1.70 for the $820m business.

But getting a deal across the line could be tough going.

Jarden last week was in the investment banking spotlight after the departure of senior staff and revelations that the value of its shares had more than halved in the past year.

The Auckland-based parent has injected cash into the business and deferred some cash bonus payments.

Jarden circulated a memo to staff last Thursday night reporting an annual $NZ40m loss for the year to March 31 but reassured staff that the bank had “set up the group for success in the future” and had achieved a profitable, $100m revenue business in tough markets with significant technology capabilities across the group.

Almost all major investment banks are understood to be cutting staff. Rising debt costs and an economic slowdown have brought deals to a temporary standstill.

The market is virtually shut for initial public offerings and equity and bond raisings are few and far between.

But Jarden and Barrenjoey have been in particular focus given they are newcomers on the investment banking scene, luring top talent through their doors in 2020 with highly attractive packages.

Even though both have landed highly sought-after mandates, many are asking where they will find funds to pay their large workforces amid light deal flow.

Reports last week surfaced of Barrenjoey working on a $25m equity raising for Peak Rare Earths. Deals that small are normally off the agenda for a bank of that size.

And there is a growing fear among deal makers that agreed transactions will fall over.

Australian agri company United Malt, the world’s fourth largest maltster and a key supplier to beer and whisky companies, last month entered exclusive discussions over a $1.5bn takeover bid from France’s InVivo.

But United Malt last week downgraded its earnings as due diligence was undertaken by the Kohlberg Kravis Roberts-backed InVivo, which owns French malt giant Malteries Soufflet.

Shares in United Malt are trading at $4.40 each after InVivo offered $5 per share.

United Malt said it expected its underlying EBITDA for the first six months of its financial year to be about $51m, lower than the previous guidance of $58 to $66m, due to softer demand from cost-conscious consumers.

While it reaffirmed full-year guidance of $140m to $160m, analysts said the company would have to pull off a stellar performance in the second half of the year to hit its numbers.