Eldridge Pope, the Dorset-based pubs operator, was forced to admit it was in the early stages of talks that might lead to a bid for the company, after its share price rose more than 25%.

Observers believe the likely bidders include Greene King, which was linked to a possible bid for the company last year, and Robert Breare's Noble House group. Pub entrepreneur Michael Cannon is also seen as an outside bet.

Talks between Greene King and Eldridge Pope are believed to have fallen down because of a substantial difference in the price the Suffolk brewer and pub owner was prepared to pay and the sum its target's main shareholders would accept.

The possible bid comes just as Eldridge Pope is making its first move into the nightclubs business, with an outlet called Bongogo due to open in Plymouth next month. The Financial Times this morning speculated that the bidder was moving in on the company to try to stop any further expansion of Bongogo, after Eldridge Pope announced in February it expects to see company-wide like-for-like sales fall this year.

The company, which is 30% owned by the Pope family, has some 175 outlets, including 21 Toad late-night youth bars. Its share price, which rose 29p to 144p yesterday, fell back 1.5p in early trading this morning.