Shares in Laura Ashley hit their highest level in nearly a year yesterday amid speculation that the home furnishings retailer could be taken private.
Rumours in the City suggested that one of the company's biggest shareholders had approached other major investors with a view to taking full control.
But analysts played down the likelihood of such a move, even though Laura Ashley is comparably smaller now than in its heyday in the 1980's.
A spokeswoman for the company declined to comment on the speculation that saw its shares climb by as much as 16 per cent.
Best known for its floral fabrics, Laura Ashley has suffered a turbulent few years and only returned to the black in 2004 when it posted profits of #3.1 million. The retailer announced plans last April to focus on Home Furnishings, reducing its clothing division to 14 per cent, down from 28 per cent last year.
The company, which has more than 180 stores in the UK, is majority owned by Malaysian United Industries, with Bonham Industries also holding a 20 per cent share. Both are headed by entrepreneur Dr Khoo Kay Peng.
Efforts to turn around the business have led to around 450 staff losing their jobs over the past 18 months, including redundancies at factories in Newtown and Carno in mid-Wales and its London head office.
Laura Ashley is currently led by Gillian Tan, who took over earlier this year from Ainum Mohd-Saaid and Rebecca Navarednam.
Ms Tan who vowed to focus on home furnishings, faced up to the challenge of reversing a 13.9 per cent fall in like-for-like sales in the first ten weeks of the financial year.
In June, Laura Ashley announced the closure of its flagship store on London's prestigious Regent Street, blaming a rise in rents by the Queen's Property estate.
The rent on the Laura Ashley store was increased 19 times, the first time its been raised in 48 years, making continued business at the site less than appealing for the home furnishing store.
In July, four executives left the retailer of their own accord with Gilian tan who is the 11th Chief Executive at the company in 14 years, widely seen in the city as needing to improve middle management and update Laura Ashley's brand image.
Evolution Securities analyst Nick Bubb said Laura Ashley would "undoubtedly" benefit from being taken private, but noted that its Malaysian owners had shown no willingness in the past to remove it from the stock market.
Speculation may have followed the recent approach by Peter Simon, the founder of Monsoon, to buy up the remaining shares in the clothing chain that he does not already own, he believed.