Hong Kong's biggest telecoms company, PCCW, is denying that it has made a bid for Cable & Wireless (C&W).
Newspaper reports had said PCCW had made a bid valuing C&W at 100p a share.
But PCCW made a statement to the Hong Kong stock exchange saying it is not engaged in any talks nor has it decided to proceed with a transaction with C&W.
According to the Financial Times, PCCW made a £2.4 billion takeover approach for C&W in early January, but was rebuffed by chairman Richard Lapthorne.
The newspaper said PCCW offered up to 100p a share, at a time when the British telecom operator's shares were at 46p - valuing it at £1.1 billion.
C&W is refusing to comment but its shares have risen almost 4 per cent to 60p today.
The company has been under pressure in recent months and last month announced that chief executive Mr Graham Wallace was to leave the group.
Mr Wallace presided over four profit warnings in the space of two years following difficulties at C&W's corporate-based internet and data business, Global.
The company's shares lost 87 per cent of their value last year, and in December C&W was relegated from the blue-chip FTSE 100 Index.