The biggest shareholder in glass specialist Pilkington yesterday broke cover and confirmed it had made a takeover approach.
The announcement sent shares in the group, whose West Midland operations include an automotive glass factory at Kings Norton in Birmingham employing about 500 people, soaring on the London stock market.
Japanese firm Nippon Sheet Glass said it was at "a very preliminary stage" of discussing a cash offer for Pilkington that analysts think could be worth up to £2 billion.
Shares in Pilkington rose as much as 323/4 yesterday as news of the bid approach broke and Nippon was touted as the likely suitor because it already owned nearly 20 per cent of the company.
The stock later retrenched as speculators took their profits and ended the day up by 261/2p, or 21 per cent, at 1531/4p.
It is thought that Nippon could generate savings from combining its UK subsidiary, NGF Europe, with the headquarters of Pilkington as they are both based in the Merseyside town of St Helens.
Traders said a price of about £2 billion on Pilkington would be in line with the recent takeovers of Aggregate Industries, RMC and Novar.
Shares in Pilkington have more than doubled over the past two years on the back of takeover chatter and growing opportunities in selling glass as a commodity, particularly to the construction sector and on the back of innovation in automotive industry.
But analysts question whether Nippon would table a formal offer if it cannot persuade Pilkington bosses to stay with the company since it currently lacks any international management.
Pilkington employs approximately 24,000 people and has sales and distribution operations in more than 130 countries.
Its revenue is split roughly 50:50 between building and automotive products. It supplied glass for the new Reichstag building in Berlin and its products go into the Aston Martin DB9 which is built at Gaydon, Warwickshire.
Last month, the company said it expected a 20 per cent rise in half-year profits as it remained on track to meet expectations for annual results. Analysts forecast profits of £196.2 million for the 12 months to the end of March, compared with £184 million a year earlier.
French firm Saint Gobain was also mentioned as a potential suitor for Pilkington, but it is thought it would struggle to convince regulators there would not be any competition issues. Saint Gobain owns the Jewson building materials chain.