Eircom was the subject of renewed takeover speculation yesterday when heavy early trading drove the telecom's price as high as €2.14.

Almost 13 million shares traded between the Dublin and London markets with the stock closing the day just three cent higher at €2.05.

The trading brought the stock back to its closing price on Wednesday, before relatively busy trading on Thursday drove the price three cent lower to €2.02.

Senior market sources said the trading yesterday was concentrated on the London exchange, where almost 8.8 million shares changed hands. Another 4.2 million shares changed hands in the Dublin market.

Renewed interest in the stock is potentially significant because Eircom is widely perceived to be in play after the unexpected collapse of takeover talks with Swisscom a month ago.

Swisscom had been prepared to pay a little above €2.40 per share for Eircom but the stock price of the Irish company collapsed when the Swiss government, owner of a controlling stake in Swisscom, vetoed any move by the company to buy into telecom groups with a public service remit.

Eircom's spokesman declined to comment yesterday when asked about trading in the shares.

However, speculation on possible buyers of the stock centred on the Australian investment fund Babcock & Brown, which holds 12.5 per cent of Eircom, and on Smart Telecom, winner of the last third-generation (3G) mobile licence.

A spokesman in London for Babcock & Brown declined to comment yesterday. The fund has said it has a long-term "strategic shareholding" in the company although many experienced Eircom watchers believe it may have other intentions.

There was no comment from Smart Telecom, which has secured significant backing from businessman Seán Quinn to develop its 3G business. Mr Quinn is considered unlikely to make any personal investment in Eircom.

One Dublin dealer said US telecom group Sprint might also be running a rule over the company.