IBM is looking at beleaguered disaster recovery company Guardian iT, according to analysts.
The company was forced last week to confirm it had been approached by an unnamed potential bidder.
Guardian said it was in "very preliminary discussions" after being told to make the disclosure by the Takeover Panel.
Guardian iT admitted that it has overstated its earnings by up to £4m for 2000 and 2001.
Market rumour initially centred on US IT companies Hewlett-Packard (HP) and SunGard as possible bidders.
But sources have now named competitor IBM as the likely contender.
IBM declined to comment, as did SunGuard.
HP ruled out the possibility "at the present time".
HP is thought by many industry insiders as being too preoccupied with its merger with fellow IT giant Compaq to become involved with Guardian iT.
Analyst Rakesh Kumar of META group said: "IBM is big enough, it has the money and the skills to do the job.
"It could be returning to the days when it just bought its competitors."
He said that despite HP having disaster recovery facilities - which include sites that can house up to
250 office staff - the companies did not fit together well enough to make a deal an attractive option for Guardian's customers.
Kumar blamed internal organisational difficulties for adding to the problems at Guardian iT, which has seen its stock plunge in value.
The shares were trading at 50p on Tuesday, up from a low of about 40p, which was reached after the company revealed its accounting discrepancies.
Kumar said: "My advice to Guardian IT would be to focus on the core business.
"There's nothing fundamentally wrong with the company."
