Manganese Bronze Holdings, which makes London's famous black cabs, has said it has received a takeover approach.

The company made the statement after seeing a substantial rise in its share price.

"This approach is very preliminary at this stage and [it] is uncertain... whether this will lead to a formal proposal," Manganese Bronze said.

Shares in the company were 16% higher at 78 pence in early afternoon trading.

Pre-tax loss

London Taxis International, wholly owned by Manganese Bronze, employs about 400 people and produces about 2,000 vehicles a year at its Coventry plant.

Earlier this month, Manganese Bronze said it had sold 196 taxis in November - down from 212 in the same month last year.

It has said it expects sales to improve when the economy picks up, particularly in London's financial district.

In its 2001/2002 financial year, the company made a pre-tax loss of �2.9m - against a �3m loss the previous year - on turnover of �119m.

China termination

In January, Manganese Bronze agreed a deal that was to have seen its cabs made in China under licence and sold throughout the Far East.

But Chinese car manufacturer Brilliance China Automotive Holdings in October terminated the agreement.

Black cabs, one of London's distinctive features, are currently exported to more than 25 countries in Europe, the Middle East, Africa and South-East Asia.