Outsourcer Capita today denied reports that the firm could be bought by private equity firm CVC Capital Partner.
Nevertheless shares still soared 10% to 32.3p as investors said they believed private equity would be circling the company.
The contractor, which runs London’s congestion charge, has seen its stock tumble 80% this year.
The Daily Mail had reported that CVC was eyeing up Capita. The newspaper also reported that a rival suitor could want to solely buy its up-for-sale education software division.
“Possible bidders might need to offer a generous premium to try to win over shareholders,” said CMC Markets’ David Madden.
The entire company is worth only £500million, and is just managing to hold on to its place in the FTSE 250 index of mid-sized companies.
Last weekend, the Mail on Sunday revealed that Capita was planning to shutter more than a third of its 250 offices, in a crushing blow to Prime Minister Boris Johnson’s efforts to get staff back into the workplace.