Shares in workplace provider Skilled Group have jumped almost 12 per cent after it announced it was back in merger talks with rival Programmed.
Skilled rejected a $1.38 takeover offer from Programmed in January, but had agreed to enter discussions again on signs the offer may be improved.
"Programmed has indicated that it is prepared to enhance the terms upon which the companies may be combined and consequently the Skilled and Programmed boards have agreed that there is merit in pursuing further discussions," Skilled said in a statement.
"There is no certainty that these discussions will result in a transaction and Skilled shareholders need take no action."
Skilled shares gained 14.5 cents, or 11.8 per cent, to $1.375, while Programmed dropped 11 cents, or 4.2 per cent, to $2.51.
Bell Direct equities analyst Julia Lee said Programmed would likely have to put forward a higher takeover offer to be successful.
"Expectations are that a takeover offer would have to be around that $1.60 mark to be successful and that's why we're seeing Skilled shares soaring today," she told Sky Business.
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