Shares in Fortescue Metals Group surged as much as 42 per cent on Monday amid market speculation that the Australian iron ore miner could be the target of a takeover bid by a group such as BHP Billiton or see a Chinese group take a stake.

The stock rose as much as 87 cents to A$2.93 before easing to close up 21 per cent at A$2.50. Fortescue, which was forced to issue a statement in response to an Australian Securities Exchange query, said it was unaware of any information that would account for the recent trading in its shares price or the volume of shares traded.