Dive Brief:

• Priority Technology Holdings has received letters from two stockholders, Steamboat Capital Partners and Buckley Capital Partners, opposing a buyout offer earlier this month from the company’s chairman and CEO, Thomas Priore, who is also the largest shareholder.
• Priore offered $6 and $6.15 per share for Priority, valuing the company at between $510 million and $520 million, according to his Nov. 9 letter to the company’s board.
• On Nov. 10, the company’s board created a special committee of “independent and disinterested directors” to evaluate the cash offer from Priore, according to a press release and filing with the Securities and Exchange Commission. The company said the committee would evaluate “any potential strategic alternatives to the proposal” from Priore.

Dive Insight:

Priore co-founded the company in 2005, and has held the top posts since 2018. His offer to buy the company follows a steep drop in the company’s stock after it reported third-quarter revenue on Nov. 6 that fell short of some analysts’ expectations. Shares were down about 30% on Nov. 7 from the prior day.

The company, based in Alpharetta, Georgia, provides payments and banking software to corporate and merchant clients for collecting, storing, lending and sending money in their financial operations.  

While Priore contends in his buyout offer letter that he’s offering investors a “premium” on the price of the stock, compared to the price on Nov. 7, investors argued in their own subsequent letters to the company that the offer undercuts the value of the stock.

“The proposed acquisition is a highly opportunistic low-ball offer,” said a letter to the board from Steamboat Managing Partner Parsa Kiai that was included in a Nov. 17 press release from that investment firm.

Kiai noted that shares declined after “a poorly received third quarter earnings release which reduced the company's 2025 revenue guidance by two percent, yet modestly increased its 2025 EBITDA guidance.”

The Steamboat letter also urged the board’s special committee to reject the “inadequate proposal and immediately explore all strategic alternatives to maximize value, with an emphasis on a sale of the company.” 

“We are prepared to join other shareholders in opposing any transaction that does not deliver full and fair value,” the Steamboat letter said.

Steamboat has an ally in Buckley, which also urged the board’s committee to reject the offer. 

“While we share Mr. Priore’s frustration regarding [Priority’s] current trading price, we strongly believe that the proposed offer price reflects an opportunistic attempt by Mr. Priore to acquire control of the Company that drastically undervalues PRTH, fails to reflect the intrinsic value of the Company, and does not compensate minority shareholders fairly for the Company's high quality, predictable business model and strong future growth prospects,” a Nov. 17 press release from the firm said.

Priore and his affiliated entities have significant sway with majority ownership of the company. The CEO controls about 60% of the stock. By contrast Buckley owns 2.2% of shares, according to its release. Steamboat’s stake wasn’t specified in its release.

TD Cowen’s analysts in a Tuesday report pointed to the company’s “challenging” third-quarter results in saying the offer may be at a “modest premium” to the stock’s current level, but is still at a “deep discount to intrinsic value” in their opinion.