Potentia Capital Management has ended its long-running negotiations with Tyro Payments over a takeover of the payments processing company. The Tyro board made it clear from the first approach that it believed the indicative offer was opportunistic, taking advantage of a slump in the company’s share price and undervaluing the business. That position did not change, even as the offer price edged up.  Potentia, which led a consortium that included HarbourVest Partners, MLC Investments Ltd and the Construction and Building Unions Superannuation Fund, first approached Tyro in September last year with an unsolicited, non-binding and indicative proposal that valued the company at $1.27 a share. Tyro rejected the proposal. Throughout 2020 and 2021, Tyro shares traded in a range between A$3 and $4 a share but last year fell to a low of 60 cents in June. Potentia came back with a revised bid of $1.60 a share and the parties entered into “extensive” discussion. The talks ended in December with the Tyro board saying the revised offer also significantly undervalued the company. Tyro was also in talks with Westpac about a bid but Westpac walked away. Then in January, the Tyro board announced: ““Following discussions between Tyro’s advisers and Potentia’s advisers, and following further consideration and consultation with its external advisers, the Tyro board yesterday offered to provide Potentia with a four-week period of due diligence to enable Potentia to develop a significantly improved proposal and confirm the necessary funding commitments attached to any possible future offer.” After making a loss $29.6 million in 2021/22, which followed a loss of $29.8 million in 2020/21, Tyro made a profit of $1.1 million in the six months to December. Last week it released earnings guidance, saying it expects EBITDA to be between $41 million and $43 million for the year to June – an upgrade to previous guidance. The company said the revised guidance was based on strong business performance in the 10 months to the end of April and a focus on cost reduction. In a statement issued yesterday, Tyro chair Fiona Pak-Poy said: “Tyro’s prospects remain strong, as highlighted in its most recent FY23 guidance. The refreshed leadership team under Jon Davey has continued to deliver substantial operational achievements.”