FirstGroup PLC (LSE:FGP) is said to be among the parties weighing bids for parts of transport group Arriva, which Deutsche Bahn is looking to offload 13 years after taking it private.
From its headquarters in Sunderland, Arriva provides bus, train, tram and waterbus services in 12 European countries.
The FTSE 250-listed bus and rail operator is likely to bid for Arriva's activities outside the UK because of regulatory hurdles associated with further expansion in the country, Reuters reported.
FirstGroup could also partner with another bidder for the UK operations, it was suggested, which include one of the UK's largest bus networks and runs around 15% of the UK's train network via the Chiltern, CrossCountry, Grand Central and Arriva Rail London franchises.
A rival bidder is infrastructure fund I Squared, which considered making an offer for FirstGroup last year.
Deutsche Bahn, the German state-owned railway operator, has said it aims to close the transaction next year.
Shares in FirstGroup were up 0.7% to 108.2p in mid-morning trading.