Troubled mortgage lender Northern Rock was yesterday engaged in talks over its future - including the possibility of a buyout - prompting a sharp rise in its share price and helping to boost blue-chip stocks on the London market.
The bank said it was in discussion with a number of parties after it received approaches regarding a "variety of transactions", including the possibility of an offer.
The bank added no price had been indicated and emphasised there could be no certainty regarding the outcome.
While its shares recovered to 182p, Northern Rock's current £766 million value is less than a third of the £2.7 billion seen before the Bank of England stepped in as emergency funder, sparking a run on the UK's fifth biggest mortgage lender.
Jose Maria Ruiz-Mateos, a Spanish entrepreneur who made his fortune marketing the sherry Harveys of Bristol, is among those interested, according to one report.
It it thought talks began after Mr Ruiz-Mateos wrote to Northern Rock at the end of last week to request a meeting to discuss the "possibilities of an acquisition".
But City experts speculated a private equity buyer was more likely after Northern Rock said there had been no talks over a firm price.
Collins Stewart analyst Alex Potter said a private equity bid "seems the more likely option".
He said: "The key would clearly be the difficulty structuring the deal - which would tally with the lack of pricing talks. This appears the most likely option but it could come below market prices."
Northern Rock's latest update followed its earlier announcement it will not pay shareholders an interim dividend payment promised in July. The bank had come under increasing criticism over the payment, worth an estimated £59 million, after the Bank of England stepped in as a lender of last resort less than two weeks ago.
The Newcastle-based group said it felt it would not be appropriate to make any dividend payment until it could make a full announcement "regarding the outcome of discussions with other parties and the development of the business model".
Conservative MP Michael Fallon, a member of the Treasury Select Committee, has also confirmed Northern Rock will face the Committee next month.
"The chairman and the chief executive of Northern Rock have been called to appear before the Treasury Select Committee next month," he said. "They will have to explain themselves in public and account for their actions."
He also confirmed a letter from Northern Rock had been sent to MPs.
The letter from the bank's chairman Matt Ridley moved to assure MPs Northern Rock's business "remains profitable and sound, with assets well in excess of liabilities."
It said: "The board is well aware of its responsibility to shareholders, including tens of thousands of small shareholders, as well as to our largest shareholder, the charitable Northern Rock Foundation."
The comments had been taken as a sign the company was defending the proposed dividend.
Dividend payments are - in theory - usually a sign of a firm's confidence.
The cancellation of the payment will be seen as a further blow to shareholders, who have set up an action group.
Roger Lawson of the UK Shareholders Association said shareholders are concerned the company is likely to be sold at a very cheap price and also had a lot of questions about what happened.
"There were no actual announcements by the company before September 14 and the company has an obligation to announce price sensitive information, which they did not do."
Meanwhile, union officials express concern for employees. Unite national officer, David Fleming said: "Northern Rock employs 6,500. It is absolutely vital and morally correct their interests are taken into consideration.
"Unite is calling on Northern Rock to be open and transparent and involve the union. The union is calling for an urgent meeting with Northern Rock to discuss potential bidders.
"The union is concerned Northern Rock's assets might be broken and a consortium of hedge funds have expressed an interest in the bank's mortgage book."