Shares in Xchanging soared 50% on Monday on news that the London-based back office processing provider has received separate takeover offers from Capita and Apollo Global Management.
Confirming press speculation, the company, which works with the insurance sector, says that it initially received an offer of 140 pence a share from Capita on 11 August.
The Xchanging board deemed this to be a "significant" undervaluing of the company but several offers later, after receiving a non-binding cash bid of 160 pence a share, it granted due diligence access to Capita.
However, private equity firm Apollo has made a separate non-binding bid of 170 pence per share - about £420 million - in cash and has also been granted due diligence access.
In a statement, Xchanging says that there can be no certainty that any offer will be made or what the terms will be. Further announcements will be made in due course.
Shares in the company jumped 50%, or 55.25 pence, on the news, closing on Monday at 166.5 pence per share.