Struggling telecoms equipment supplier Newbridge Networks admitted on Friday that it was in talks with French telecommunications giant, Alcatel.
But a Newbridge spokesman refused to say whether they were takeover talks and also denied reports elsewhere that it was talking to Ericsson.
The Canadian company has been the subject of bid speculation for weeks, but Friday was the first time that it has given any credence to the rumours.
The Newbridge spokesman added cryptically: "I wouldn't say we're not talking to Alcatel. We are. But at this point, I wouldn't say we're discussing a takeover. That's how I'd phrase that statement."
Acquisition speculation has been growing steadily since 2 November when Newbridge announced that its second quarter revenues and profits would be below analysts' expectations.
Alan Lutz, the supplier's president, and other senior executives resigned the same day.
Terence Matthews, its chief executive, said at the time: "I am working with the executive team of Newbridge to finalise an action plan that leverages these core strengths of the Company and addresses issues that require attention, primarily sales effectiveness and our ability to scale customer facing resources. We will discuss this plan in further detail at the November 18 conference call."
Newbridge's stock price rose more than 13 per cent to $20.63 on Friday alone, after a Wall Street pundit said that Alcatel was willing to pay $24 a share for the firm. But Canadian newspapers reported that Ericsson was the hot favourite to acquire it.
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