Tax Systems (LON:TAX) said it is considering an £85mln bid approach from private equity firm Bowmark Capital.
The latter has tabled a deal of 110p a share, all in cash.
On Wednesday night the shares, up from a 2019 low of 86.5pc and losed at 100.5p.
MXC Capital, which holds just over 25% of Tax Systems, has given its backing to the putative Bowmark deal.
Tax Systems in its announcement cautioned: “There can be no certainty that an offer will be made by Bowmark for Tax Systems, nor as to the terms on which any such offer may be made.”