Lonmin, the world's third-largest platinum producer, chaired by the former Morgan Grenfell chief executive Sir John Craven, stressed that discussions with an unnamed suitor were at a "very preliminary stage". The shares jumped 25 per cent to a record high of 2,671p, giving the group a market value of £3.75bn.
News of the approach sent shares in other miners up strongly. Anglo-American rose 123p to 2,145p, making it the best performer in the FTSE 100.
Market speculation centred on Canada's Barrick, the world's largest gold mining group, which has been acquisitive of late. It is about to buy Australia's Tethyan Copper for £80m in a joint bid with Antofagasta. It recently acquired its first platinum project in South Africa and sealed the takeover of the Canadian gold producer, Placer Dome.
Another possible bidder is the Switzerland-based Xstrata, which lost out in two recent takeover battles. Last year it was beaten by BHP Billiton in the battle for Australia's WMC and later failed in its bid for Canada's Falconbridge. Some now believe it is desperate to do a deal. Xstrata's chief executive, Mick Davis, is believed to have long held ambitions to return to South Africa for an acquisition. An acquisition would also help ward off unwanted advances from large players such as BHP.
John Meyer, at Numis, said Xstrata was generating substantial cash of about $2bn (£1.1bn) a year and could easily afford to acquire Lonmin or its larger rival, Impala Platinum. But he warned: "We do not believe Lonmin shares justify the current valuation. The talks may be over or may fall through. We urge investors not to get carried away with this current 'irrational exuberance'."
Analysts said the world's largest and second-biggest platinum producers, Anglo Platinum and Impala, would find it hard to bid because of competition concerns.
Lonmin has long been viewed as vulnerable to a bid. Merrill Lynch caused excitement in November when it talked of the group as a takeover target and upgraded the stock all the way from "sell" to "buy".
Analysts highlighted certain problems with Lonmin. It is busy digesting its acquisition of Southern Platinum which had struggled to make a new platinum mine work. Lonmin has also suffered two explosions at its new smelter in South Africa. Mr Meyer said the smelter could now be uninsurable and the potential loss of business if there were a further explosion could endanger the company's survival as an independent group.
Three quarters of the world's platinum is mined in South Africa, where the recent rally in the rand has curtailed investment because it dents profits of major mining groups that report in dollars.