Electricite de France (EDF) is said to be considering making a bid for nuclear power company British Energy.
According to Reuters, a source close to the matter said the French company might enter the bidding, but would not overpay for the company.
The rumor comes after reports that German utility company RWE was making an £11 billion bid for British Energy, valuing the company at just under 700 pence per share.
British Energy has become a takeover target and is in need of extra financial power in order to build new nuclear power stations and clean up reactor sites. The company has been forced to close some of its plants in the face of rising costs.
Four of the company's reactors were closed at the end of last year thanks to problems with boiler closure units.
Whilst the government is in favour of building more nuclear power plants, in a bid to reduce damage to the environment, there are concerns that a foreign takeover could lead to UK job losses.
The takeover talk gave a boost to British Energy shares rose 1.28 per cent to 749 pence per share by 9:49am on Friday.