Shares in Guardian IT shot up last week by more than 23p on reports of an impending takeover.

US competitor SunGard was reported to be on the verge of clinching a deal after a period of collapsing confidence in the UK company.

Guardian IT's customer numbers have been falling along with the share price, which crashed to less than 40p from more than 450p in December 2001.

The disaster recovery firm revealed in February it had found holes in its accounts worth up to £4m, prompting the chairman to quit.

The share's decimation reflected investors' nervousness about accounting problems in the wake of the Enron scandal last year.

Within days, it was in talks with a potential bidder.

It has debts of up to £110m and is expected to make a loss of about £28m this year.