Industrial group Melrose has seen its share price climb sharply in recent days.
It is one of those companies said to benefit from the recent slump in the pound, since the weak exchange rate should boost export business.
But traders said its current strength - it is up 9.6p to 255.3p and is the biggest riser in the FTSE 100 - could also be due to a possible deal in its sector.
Private equity firm KKR is reportedly offering nearly $3.7bn for Gardner Denver, a US industrial machinery maker, and this move has prompted investors to take a look at similar companies, such as Melrose.
