Shares in oil rig contractor Abbot soared this morning after the company confirmed that it had received an approach which could lead to a takeover.
Confirmation of the approach came after a report claimed that the North Sea's largest offshore drilling contractor was in talks with private equity firm 3i over a possible bid.
According to the Financial Times 3i has made an indicative offer of 375p-a-share for Abbot, a price which would value the oil services firm at £870 million.
The paper claims that 3i has subsequently been granted limited access to Abbot's books and that talks between the two firms have "moved well beyond the preliminary stage".
However Abbot has not revealed the identity of its suitor.
In a statement the Aberdeen-based company said: "The board confirms that it has received proposals which may ultimately lead to an offer being made for the company.
"There can be no certainty that either an offer will be forthcoming, or at a price that would be acceptable to the board," Abbot added.
News of a potential takeover approach for Abbot saw the company's shares open up 20 per cent higher at 347p.
Analysts say Abbot's share price has underperformed that of its domestic rivals by around 28 per cent this year, with maintenance on two of its rigs having impacted upon its first-half results.
However rising oil prices and falling production levels have led oil firms to spend more money on drilling in recent times, with oil services companies having become attractive takeover targets as a result.
Project management and engineering group AMEC has previously been tipped as a potential bidder for Abbot.
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