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Tyro tussle may be tricky

Corporate and M&A
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Corporate and M&A partner Jason van Grieken has used a comment article in today’s The Australian to outline how increasingly popular “pre-bid agreements” between a potential bidder and a target shareholder need to be carefully structured “lest their apparent tactical advantage becomes an ‘own goal’”.

Jason draws on the “arm wrestle” to gain control of Tyro Payments to explain how the pre-bid agreement between private equity firm Potentia, whose offer was immediately rejected by the Tyro board, and Tyro’s biggest shareholder, Grok Ventures, includes “all the high-stakes ingredients to make for fascinating viewing”.

A pre-bid agreement, Jason writes, is an arrangement between a potential bidder and a target shareholder which, in effect, commits the target shareholder to accept the bidder’s offer.  It can provide a bidder with a clear tactical advantage in seeking to acquire an ASX-listed company because they allow the bidder to build a strategic position in the target whilst deterring competing bids.

“Grok, the private investment company of Atlassian co-founder Mike Cannon-Brookes, is an invaluable ally for Potentia. But unusual features of their pre-bid agreement may be open to attack by rival bidders, and provide the catalyst for legal action around whether such arrangements fairly represent the interests of all shareholders.”

To read the full article, click here.

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