Stentor has announced that discussions are taking place which may or may not lead to an offer for the telecoms group.

The potential offer is at a price "significantly below that of the current price of the company's ordinary shares", Stentor said in a statement to the Stock Exchange following a sharp rise in the group's share price on Monday.

Stentor shares rose 11.5p sterling to 70p on Monday, but dropped yesterday as low as 37p before closing down 25p on the day at 45p. There are 14 million shares quoted but, on a fully diluted basis, there are 120 million shares in issue. A spokesman for Stentor said a further announcement would be made in due course. He would not discuss the matter further.

In the year to March 31st, 1999, Stentor made pre-tax losses of £11.17 million (14.19 million).

In December 1998, shareholders agreed an £8.3 million rescue plan with the Co-operation Retirement Benefit Fund, which controls 82 per cent of the company. At the time, the company said it would take three years to break even.

Shares in the company rose in December 1999 following a deal with Cisco Systems. Stentor agreed to buy hardware and software from Cisco, enabling it to provide intelligent call routing and web-enablement services in Ireland, Europe and the US.