Vodafone homes in on Project Telecom deal

The mobile phone operator Vodafone is thought to be one of the players interested in snapping up Project Telecom, the telecoms business which confirmed yesterday it had received "approaches".

Project Telecom made the announcement after a sharp rise in its shares over the past few weeks - a rally that had been fuelled by speculation that Vodafone was casting its eye over the business.

Rumours continued to circulate last night that Vodafone was the main name in the frame and that the mobile phone giant was willing to pay at least 70p a share in cash. The mobile phone operator refused to comment last night. Project Telecom, meanwhile, emphasised that any discussions "with the interested parties" were at a "very early stage".

Shares in Project Telecom, which stood at 34p at the beginning of May after it issued a profit warning, ticked up 8p at 57p yesterday.

Project Telecom provides mobile and fixed line telecoms services to the business market, although more than 90 per cent of its profits come from reselling mobile services, mainly Vodafone's.