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Shares in Marconi, the telecoms equipment manufacturer, rose almost 15 per cent on Monday as the company confirmed it had held talks with a number of potential bidders.
The company said it was “continuing to pursue all strategic options with the objective of maximising shareholder value. These include, among a range of alternatives, talks with third parties about potential business combinations”.
The announcement followed a statement by Marconi in May that effectively put the group up for sale, after it had lost out on a crucial £10bn ($17.9bn) contract with BT Group, by far its single biggest customer.
Marconi said the discussions were at “a preliminary stage and there can be no assurance that an offer will ultimately take place”.
Nevertheless, the statement only fuelled the buying spree with the shares closing up 39¼p at 305¾p.
Marconi refused to comment further but one source close to the matter said the company had held talks with “quite a number of people” and stressed that not all discussions were just about a potential takeover but also included partnerships and joint ventures.
It is understood that one of the companies that has sounded out Marconi is China's Huawei. The Shenzhen-based company refused to comment on Monday other than describing the press reports as “speculation”.
Huawei is seen as one of the most likely bidders for Marconi, in part because the companies already have an agreement to distribute a number of each other's products. Huawei is also expanding internationally, and the acquisition of Marconi would give it a presence in key markets, including the UK, Germany and the US.
Marconi this year appointed Morgan Stanley, the US investment bank, to advise it on its strategic options after losing out on the BT contract.
Additional reporting by Alexandra Harney in Hong Kong