Tyro Payments Limited (ASX:TYR) shares were smashed after it ended takeover talks with a private equity consortium, after a second potential bidder Westpac Banking Corporation (ASX:WBC) walked away. The payments company says it is open to a “credible” proposal after dismissing an increased offer of $1.60 from Potentia Capital Pty. Ltd., first revealed by Street Talk, that equated to an enterprise value of approximately $875 million.

The Tyro board’s rapid-fire rejection of the improved $1.60 offer, up from the initial $1.26 bid and representing a 62% premium to the 30 day volume-weighted-average-price, sparked anger from some shareholders. Tyro shares fell nearly 20% to $1.20 in early trading as it indicated it would forge ahead with current growth plans under new chief executive Jonathan Davey. Tyro said the offer was conditional upon completion of confirmatory due diligence, rather than the 6 to 8 weeks undertaken by rival bidder Westpac, which said it was walking away on Monday.

Potentia’s offer was also conditional on “obtaining any consents required under material contracts and leases”. Tyro expects its alliance to provide merchant payments terminals for Bendigo and Adelaide Bank is expected to add $5.2 billion in transactions to its volumes. One of Tyro’s last remaining substantial shareholders, Fidelity, sold its stake for less than the $1.28 a share first offered by Potentia, with Grok Ventures and Potentia together left holding around 25% of its shares.

Under the terms of the deals, shareholders would have had the option to take their payout in cash, half cash, half scrip or receive all scrip in the unlisted private Potentia investment vehicle. Potentia operated in a consortium with HarbourVest Partners, MLC Investments and Cbus Super.