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Tyro Payments (ASX: TYR) will receive $10 million in damages as part of a settlement with one of its agents Kounta, which a court found last year had breached its contract with the Sydney-based fintech by pitching its own competing service Lightspeed Payments to Tyro's existing customers.
Like Tyro, Kounta was also founded in Sydney but in 2019 was acquired by Canada's Lightspeed Commerce (TSE: LSPD) for US$35.3 million ($54.7 million).
Tyro, whose market capitalisation of $602 million is just over a quarter of the size of Lightspeed, took legal action in September against Kounta after attempting to resolve the matter commercially but without resolution.
A November decision by the Supreme Court of NSW issued a restraint on Kounta from marketing the Lightspeed product to existing Tyro merchants until 6 September, but in December the defendant filed an appeal seeking to set aside the court's orders.
After reaching a settlement Kounta has agreed to drop the appeal and pay Tyro $10 million, while the judgment will be entered in favour of Tyro in the proceedings and the existing restriction will remain in place until 6 September, applying also to affiliates Lightspeed Commerce and its New Zealand-based subsidiary Vend Limited.
Tyro's shares have rebounded strongly since the November decision, up 14 per cent prior to the market opening today at $1.155.
This price is still well below its trading close to the $4 mark in early 2021 when thousands of the company's merchants were plagued by outages of Tyro's EFTPOS terminals - a matter that eventually led to the settlement of a class action last year.
In September 2022 Tyro became a target of a takeover bidding war, starting with a consortium of private investors including MLC Investments which pitched to buy the company for $660 million, before also attracting interest from Westpac (ASX: WBC) and Potentia Capital.
Potentia lifted the bid for Tyro to $875 million but the board was not interested. Talks resumed in January 2023, but in May the suitor walked away after eight months of negotiations.
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