Shares in Haversham Holdings were temporarily suspended this morning after the fund confirmed it was in "advanced" takeover talks without naming its potential target.
This follows reports Haversham has its eye on Europe’s biggest second-hand car dealership, BCA Marketplace, and is putting together an offer worth about £1bn.
Haversham today said if a deal was completed, it would most likely take the form of a reverse takeover, giving the car auction site a stock market presence and tradeable shares on the London stock exchange.
"In accordance with the AIM Rules, trading in Haversham's ordinary shares has been suspended pending conclusion of these discussions," it said.
"There can be no certainty at this time that a transaction will proceed and we will update shareholders in due course."
BCA made a bid to float last year but halted plans amid economic uncertainty and a raft of disappointing listings. The company has over 200 locations in 13 European countries, and sold more than 900,000 vehicles last year.