The Smartpay Holdings Ltd (ASX: SMP) share price has rocketed higher 46% after receiving takeover bids.
Smartpay provides payment systems for businesses to take payments for customers at places like cafes and shops.
Takeover bids for Smartpay shares
The company announced it has received two separate, conditional, non-binding bids.
One of the bids is from Tyro Payments Ltd (ASX: TYR) and the other is from an international party.
The Tyro bid is to buy the entire Smartpay business for a price of NZ$1 (or A$0.90) per share, comprising a majority of Tyro shares as well as part of it being cash.
There was less detail about the other offer – the proposal is to acquire 100% of Smartpay.
Both proposals are preliminary and include conditions like satisfactory completion of due diligence.
Company response
As the Smartpay board reviewed the proposals, it has decided to allow both Tyro and the other party to do an initial limited period of due diligence on a non-exclusive basis.
This will allow Smartpay to better assess the relative merits of each proposal and give each party an opportunity to further improve their bids.
Smartpay will also conduct due diligence on Tyro considering the majority of the offer would be satisfied by Tyro shares.
Smartpay noted that providing limited due diligence does not guarantee either initial offers will turn into a binding offer, or an offer that is capable of being recommended by the Smartpay board. There is “no certainty that any transaction will arise”.
The company said Smartpay shareholders don’t need to take any action. It will continue to keep shareholders informed.
Final thoughts on the Smartpay share price
The business is still trading at discount of more than 10% to the offer price of A$0.90. We don’t know how large the other offer was, but it’s possible the offers could be increased. It may still be a little undervalued if real offers come through.
But, most of the upside has already happened today. After the recent market tariff pain, there are plenty of other opportunities, like ASX growth shares, that could have better upside.
