(Adds details on the deal, background) May 22 (Reuters) -...

(Adds details on the deal, background)

May 22 (Reuters) - Australia's Tyro Payments (TYR) said on Monday it has ended deal discussions with suitor Potentia Capital, months after the payment terminals firm rejected the private equity group's A$875 million ($593.5 million) buyout proposal.

Potentia's decision to withdraw the offer follows Tyro granting it due diligence and engaging in "extensive negotiation" of material commercial terms, Tyro said in a statement.

"Tyro also worked with Potentia to develop processes that could potentially address regulatory requirements to reduce risk to Tyro by providing increased confidence of completion in a reasonable timeframe," it added.

Potentia had first offered to buy Tyro for A$1.27 per share in September, then improved its offer to A$1.60 in December.

Tyro

rejected

both offers, saying they undervalued the company.

In January, Tyro opened the door to re-engaging with Potentia by offering it

access to its books

to come up with an improved proposal and confirm the necessary funding commitments.

Potentia did not immediately respond to a Reuters' request for comment. ($1 = 1.4743 Australian dollars)