** Shares of Paycor HCM up 23.2% to $22.85 premarket on potential M&A news

** PYCR shares could open at highest levels since Oct 2013, if gains hold. ** Paychex in advanced talks to acquire smaller payroll processing rival PYCR, Bloomberg News reported on Sunday, citing people with knowledge ** A deal may be announced as soon as this week, said the people, adding nothing has been finalized and talks could still fall through, according to the report

** Cincinatti, Ohio-based PYCR's market value stood at ~$3.3 bln as of Fri, per LSEG data. Rochester, New York-based PAYX had market cap of ~$50 bln ** Shares of PAYX down 0.3% at $139.20 before the bell

** Potential deal would be a surprise, given client overlap and platform duplication, TD Cowen wrote in note, saying views PAYX as being opportunistic "evaluating an undervalued asset"

** TD Cowen has 'buy' rating on PYCR with $22 PT

** In 2024, PYCR shares lost 14%, while PAYX shares rose ~18%

(Lance Tupper is a Reuters market analyst. The views expressed are his own) ((lance.tupper@tr.com 1-646-279-6380))