Shares in telecoms firm TalkTalk have surged 16% after it agreed to consider a takeover bid from investment firm Toscafund that values it at £1.1bn.
TalkTalk said that its board had "agreed to progress the proposal further" and would consult advisers.
But it added that to make any firm bid, Toscafund would have to get the backing of TalkTalk chairman Charles Dunstone, who owns nearly 30% of the firm.
Toscafund already has a similarly sized stake in the company.
The offer is worth 97p a share, considerably less than a 135p-per-share offer that Toscafund reportedly made last year.
The bid comes amid continued dissatisfaction among customers with the level of service they receive from TalkTalk.
In recent years, the firm has frequently been assigned low rankings in surveys by regulator Ofcom.
London-based Toscafund is run by founder Martin Hughes, who is believed to be one of the UK's richest hedge fund managers.
His reputation for tenacity in forcing companies to change has earned him the nickname of "the Rottweiler" in City circles.
If his takeover of TalkTalk succeeds, he will be increasing his presence in one of Europe's biggest and most competitive telecoms markets.
However, consolidation has proved elusive in recent years, with attempted tie-ups coming under scrutiny from regulators.
In the latest such example, the UK's Competition and Markets Authority (CMA) signalled on Thursday that it wanted to investigate the proposed merger of Virgin Media and Virgin Mobile with O2.
The deal comes within the scope of the European Commission, since the UK is still technically part of the EU during the Brexit transition period.
However, the CMA is arguing for the case to be transferred from Brussels, since the impact on competition will be limited to UK consumers.