Speculation over the future of coffee bar chain Coffee Republic intensified after the group confirmed it had received a takeover approach.
Shares in the struggling business moved ahead by 17 per cent in the City. The suitor is believed to be rival Caffe Nero, which has a 4.3 per cent stake in the company.
Its market value plunged last week after it called a halt to its expansion programme following poor sales and spiralling annual losses.
Insiders at Caffe Nero said its decision to take a stake in its rival was a strategic investment.
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