Mobile phone games and ringtones firm Monstermob has said that it has received an approach that may lead to a takeover offer.
Tougher UK controls are set to hit profits
Speculation about a possible move for the company had led to a sharp jump in its share price on Monday.
Monstermob said talks were at a "preliminary stage" and there was no certainty that an offer would be made.
The company, which has recently been expanding into China, has had a tough year, seeing its share price fall 90%.
Monstermob began to expand overseas to offset tougher controls in the UK. In April, it warned that UK profits would be lower this year, because of new regulatory controls restricting subscription services.
However, in early July, its shares sank after it said that changes to subscription services operated via China Mobile could have a "substantial" short-term impact on its revenues in the country.