Shares in BSkyB yesterday gained three per cent, boosted by market talk that Rupert Murdoch's News Corporation might increase its holding in the UK-listed satellite broadcaster.
"It is perceived that Rupert Murdoch is raising his stake," one dealer said.
Another added: "There was a rumour that News Corp might be buying them back or buying the rest of Sky out."
A third dealer said a bid approach could be priced at 700 pence a share.
News Corporation owns 38 per cent of BSkyB, which Rupert Murdoch chairs. His son, James, is BSkyB's chief executive.
Analysts were sceptical of the likelihood that News Corporation would increase its holdings.
"The rationale is because it's cheap and you could leverage up the company, but with the dollar going the way it is, it's not as cheap as it used to be," said Exane BNP Paribas analyst Philip Guest. "I'd be surprised if that was what was driving it today."
The second trader said speculation that News Corporation was looking to bring an initial public offering of Sky Italia shares to market also seemed to pour cold water on a buyout move.