Shares in embattled UK telecoms and internet firm Energis have surged following speculation that the company may be bought out by a US rival.

Energis shares were trading 12% higher at 4.2p late on Monday morning.

Traders attributed the increase to weekend press reports naming US telecoms and internet giant Worldcom as a possible bidder for the UK firm.

The buyout speculation followed news last week that Energis' bankers had lifted lending restrictions on the firm, clearing the way for a sorely-needed cash injection.

Energis shares collapsed in January after the debt-laden company shocked investors by warning that slowing sales had put it at risk of breaching financing arrangements with creditors.

Energis, formerly part of the UK's electricity generator the National Grid, built its own telecoms network on the back of the UK's electricity infrastructure.

It attracted strong interest from investors during the 1990s telecoms boom, with Energis shares hitting a high of about 800p in early 2000.