Spring Ram said it had held preliminary discussions with Masco, a US building materials group.
However, the company's newly appointed chairman, Roger Regan, played down the likelihood that the negotiations would lead to a full bid.
'Over the past week I have had a string of bargain hunters on the telephone,' Mr Regan said. 'Masco is more serious than that but my main aim is to give stability so that the company can trade independently over the next five years.'
He said: 'Everybody at the company wants to settle down. However, I have to keep an eye out for shareholder value and if someone comes along prepared to bid I will try and assess what is best for shareholders.'
Institutional shareholders are unlikely to back a bid unless the terms are very attractive. Led by Prudential, shareholders pushed hard for the injection of new management, and want to give Mr Regan, the new finance director, Martin Towers, and the new non-executive directors a chance to turn the company around.
The Seaq trading system recorded heavy trading in Spring Ram shares, putting volume at 7 million. The shares closed up 15p at 69p.
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