Telecom equipment maker Marconi this morning refused to confirm whether it was in talks to be acquired by Ericsson, as bid speculation naming the larger Swedish rival sent the firm's shares to a five-month high.
"We do not comment on rumours and this is just another rumour," spokesman David Beck said, adding that Marconi had no plans to issue a statement on Monday.
People familiar with the negotiations told Reuters on Sunday that Ericsson was in talks to buy the firm and a deal could be announced within weeks.
Britain's Financial Mail newspaper said in an unsourced report the same day that Ericsson saw a total valuation of up to 1.3 billion pounds for Marconi.
Hopes of a bid have helped Marconi's shares recover from a steep fall in April when it lost a much-expected network upgrade contract from its largest customer, BT Group Plc. Marconi has said it is considering all strategic options and has confirmed it is in talks with potential suitors.
Chinese telecoms equipment vendor Huawei Technologies, with which Marconi already has an agreement to sell each other's products, was long considered the frontrunner, but in recent weeks has been upstaged by Ericsson as the favourite.
Other bidders mentioned in the past include France's Alcatel, Germany's Siemens and China's ZTE.
Shares in Marconi leaped 10 percent to 337-3/4 pence on Monday, a level last seen in April.
Analysts said a takeover of the company would help wireless giant Ericsson boost its fixed-line business and give it access to BT. But there were doubts over how much any acquirer would be prepared to pay given that Marconi's revenue from BT is set to decline over the next few years.
"I think the probability is quite high. They (Ericsson) have at least valued the case," said Helena Nordman-Knutson, an analyst at Ohman Securities in Stockholm.