ThirdForce, the Dublin-based firm formerly known as Rapid Technology, is in takeover talks with a small private Irish e-learning firm.

In a disclosure to the Stock Exchange yesterday after days of speculation, the firm said it had noted movements in its share price and wished to disclose that it was in talks with a firm that may lead to an acquisition.

ThirdForce has been in discussion with several Irish and British-based e-learning companies, including the Limerick firm, Prime Learning, in recent weeks.

But senior industry sources said last night that it was unlikely that the company would be able to seal a deal with Prime Learning, which was part-funded by Independent News & Media.

Other firms in the e-learning sector in the Republic include Intuition, WBT and Interactive Services. There are also scores of small e-learning firms in Britain that could be the subject of takeover discussions by the firm.

Mr Gerry Hennigan, technology analyst with Goodbody Stockbrokers, said the company's strategy was simple enough.

"They are trying to build a stable of e-learning firms to try to build some scale into the business. Whether they can do it or not remains to be seen," he said.

Shares in ThirdForce fell back four cents to €0.40 last night after several days of gains, which saw it almost double its market capitalisation to €55 million.

ThirdForce was created last March when Rapid Technology- a software firm founded by Irish entrepreneur Mr Pat McDonagh, acquired the private e-learning firm Electric Paper. The firm has stated that its intention is to acquire other e-learning companies and achieve greater scale.

Mr McDonagh is also founder of the two biggest Irish-based e-learning companies, SmartForce and Riverdeep.