Metro Bank Plc shares surged on Monday following reports over the weekend that it has been approached by private equity firm Pollen Street Capital about a possible takeover.
According to Sky News, Metro was approached in the last fortnight about an offer to take it private spearheaded by the financial services-focused buyout firm.
Pollen Street is one of the major shareholders in Shawbrook, the mid-sized bank which in the past has approached Metro Bank about a merger of the two companies.
According to Sky, in recent months, Shawbrook's owners have stepped up efforts to identify a prospective corporate combination, holding tentative talks with Starling Bank about a £5bn tie-up, while also drawing up plans for a stock market listing.
At 0815 BST, Metro Bank shares were up 8.8% at 122.06p.
Metro declined to comment on the report.