Glen Dimplex may be in the running to buy another British publicly-quoted electrical company after Kenwood announced yesterday that it had received a possible bid approach. The announcement sent Kenwood shares soaring and, at the close of trading, the British company was valued at £39 million sterling (€65 million).

Glen Dimplex has been increasing its stake steadily in Kenwood for over a year and last month brought it to more than 10 per cent. As a result, Glen Dimplex is seen as a frontrunner to buy Kenwood although another British domestic appliances company, Pifco, has repeatedly expressed interest in Kenwood without going so far as making a formal approach. No Glen Dimplex spokesman could be contacted for comment.

Earlier this month it emerged that Kenwood had called in accountants Pricewaterhouse Coopers to carry out a strategic review of the business.

The approach comes only a matter of weeks after Kenwood was forced to write off £1 million in accounting irregularities, a charge that drove Kenwood shares close to a five-year low. While Kenwood's losses in the most recent half-year remain high at £2.2 million sterling, Kenwood's sales were sharply higher at more than £71 million sterling.

Some in the market believe that after three years of severe losses and rationalisation, Kenwood may now have turned the corner.

Yesterday, after the announcement of the approach, Kenwood shares rose as high as 85p sterling before closing 10p higher on 73p sterling. At this price, Kenwood is valued at £39 million sterling, although analysts believe any bid is likely to have to be pitched higher, in excess of £45 million sterling.