Paragon, the struggling buy-to-let mortgage lender, said on Tuesday it had received takeover approaches from several groups, sending its shares up 22 per cent.

Blackstone, the US private equity group, is among the bidders, which appear to be calling the bottom of the credit crisis.

The approaches show that investors are still keen put money into the mortgage market, in spite of the crisis it has suffered, as they believe the financial turmoil is creating opportunities for buying bargains.

Shares in Paragon, which have risen sharply in recent days on takeover speculation, jumped 18½p to 102½p in mid-afternoon London trading on Tuesday, giving the company a market value of about £297m.

“Paragon confirms that it has received approaches from parties who have expressed interest in evaluating potential offers for the company,” it said in a statement.

“The board has entered exploratory discussions with, and is providing certain due diligence access to, the parties concerned,” it added.

However, the company warned “there can be no certainty that these discussions will lead to any offer being forthcoming”.

Paragon shares have fallen almost 90 per cent in a year, as the credit crunch has inflated the Solihull-based company’s cost of funding, eroded its profitability and restricted its ability to write new mortgages.

Its takeover talks come weeks after private equity group TPG Capital walked away from a planned 23 per cent investment in Bradford & Bingley, the UK’s leading buy-to-let mortgage lender, following a credit rating downgrade.

Blackstone cemented its place as one of the world’s leading private equity groups by floating in New York last year, but until now it has stayed on the sidelines while other buy-out groups have made a string of financial services investments.

Yet this may be changing because David Blitzer, head of Blackstone’s London office, is leading the talks with Paragon, according to people familiar with the discussions.

Paragon was the first UK mortgage lender to launch a deeply discounted rights issue when it raised £287m in February at an issue price of 100p a share.

The lender has said it expects to write far fewer mortgages until credit conditions improve. However, it said last week that the number of its accounts in arrears has fallen since March 31 and its profits remain in line with expectations.

”The performance of the buy-to-let book continues to be exemplary and landlords are benefiting from increased rents and yields in the current environment as house purchases have slowed,” it said.

Since the end of its financial year, Paragon has reduced its employee numbers by about 30 per cent.

Profits in the six months to March fell 39 per cent to £26.4m.

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