Cable & Wireless has approached the network operator Thus to discuss a possible takeover.
On Thursday, Cable & Wireless issued a statement to its investors in which it said it "notes the recent movement in the share price of Thus Group and confirms that it has made a preliminary approach to the board of Thus in relation to a possible offer for the company".
"This announcement does not amount to a firm intention to make an offer and, accordingly, there can be no certainty that an offer will be made," Cable & Wireless's statement added. Thus also issued a statement noting the possibility of an offer but added that it "is confident in its future as an independent group".
"The board remains focused on delivering maximum value for shareholders and will evaluate any proposal from any third party against the value that the company can deliver as an independent group," Thus's statement read. "There can be no assurance that any offer for the company will be forthcoming. The board urges shareholders to take no action at this time. A further announcement will be made in due course."
Thus operates one of the UK's "next-generation" fibre-based networks, and offers home and business communications services through its Demon brand. Cable & Wireless offers IP services to large enterprises, but has not been in the smaller-scale broadband market since selling off its Bulldog ISP to Pipex — now Tiscali — in 2006.