Following “extensive” discussions with two suitors over the past few months, Tyro Payments announced yesterday that it has ended talks, despite a significant improvement in one of the proposals. 

Tyro said the discussions, with Westpac and a consortium led by Potentia Capital Management, have not resulted in a proposal that the board believes fairly values the company.

At the same time, Westpac put out a statement saying it has undertaken due diligence on Tyro and decided that submitting an offer would not be in the best interests of Westpac shareholders.

Tyro said it remains open to “engaging with any credible change of control proposal” that represents good value for Tyro shareholders.

Tyro was first approached by the Potentia consortium in September, with a proposal that valued the company at A$1.27 a share.

Tyro said the bid was opportunistic. Throughout 2020 and 2021, Tyro shares traded in a range between $3 and $4 a share but this year have fallen to a low of 60 cents. It is currently trading around $1.30.

Like all fintechs, Tyro is under pressure from investors to produce earnings. It made a loss for the year to June and was cash flow negative. It has not made a profit in the past five years.

Tyro reported yesterday that Potentia has come back with a revised bid of $1.60 a share. It said the revised offer continues to “significantly undervalue” the business.

“The board further noted that the revised indicative proposal comes at a time of significant share market volatility and cyclical weakness in global technology and payment company valuations, with Tyro’s share price trading as high as $2.92 within the past 12 months,” it said.