Oct 18 (Reuters) - Australia's Tyro Payments Ltd (TYR.AX) confirmed on Tuesday it was in preliminary takeover talks with selected parties, including no.3 lender Westpac Banking Corp (WBC.AX), sending shares of the payment terminals firm up more than 5%. Tyro last month rejected a A$1.27 per share indicative offer from a private equity consortium led by Potentia Capital Management. Westpac on Tuesday separately confirmed the talks in a brief statement and said a potential deal would strengthen its small business proposition. "From a Tyro perspective, it's clear that Westpac would have significantly more synergies than the PE consortium. He said the logic of synergies from a deal for Tyro should also apply to Westpac's rivals National Australia Bank (NAB.AX) and Australia an New Zealand Banking Group (ANZ.AX).

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