An investment trust part-owned by the Rothschild family has made a takeover approach to rival fund manager Alliance Trust PLC.
Alliance said RIT Capital Partners plc (LON:RCP) had approached it with an informal proposal to merge the two companies, but had not provided any detailed terms.
Alliance said in a statement: "The board of Alliance Trust will incorporate any formal merger proposal received from RIT into its strategic review, alongside the other options being considered.
"There can be no certainty that any transaction will result from the review.
"In the interim, shareholders are strongly advised to take no action and to await the outcome of the review."
Alliance's former chief executive Katherine Garrett-Cox left the company in March after becoming boss of its subsidiary Alliance Trust Investments (ATI) following a shake-up last October.
In the restructuring, Alliance outlined plans to sell non-core investments, cut costs by £6mln this year and make the board fully independent, consisting wholly of non-executive directors.
RIT Capital Partners traces its origins back to the earlier Rothschild Investment Trust, originally associated with the family bank, NM Rothschild & Sons.
It was listed on the London Stock Exchange with net assets of £281m in 1988 and is now one of the UK’s largest investment trusts, with a market capitalisation of around £2.5bn.
Lord Rothschild remains chairman and he and his family are the largest shareholders with a 21% stake.
RIT said: "The possibility of combining the two companies for the benefit of both sets of shareholders is at a very preliminary stage of consideration.
"Further analysis and discussion will determine whether such an outcome is indeed in the best interests of shareholders and can be achieved.
"There is no certainty that an offer by RIT for the share capital of Alliance Trust will be made."
Shares in Alliance rose 3.6% to 526.6p in early London trading. RIT's stock fell 1.2% to 1599.1p.