By Myles Neligan BBC News Online business reporter

A wave of speculative buying, the like of which has not been seen since the company's heavily oversubscribed stock market debut in March 2000, has nearly doubled its share price in the past three months.

Lastminute shares, which were worth about 120p at the beginning of May, were changing hands on Friday morning at 217.5p, putting them back within a respectable distance of their original list price of 380p.

It is a remarkable comeback for a firm which less than two years ago was written off as one of the internet era's more spectacular busted flushes, with a stock price struggling to clear the 20p mark.

Rumour mill

To be fair, Lastminute has never looked like running out of cash, and news that it had made an earlier than expected profit in the July to September quarter of 2002 made it one of last year's stronger stock market performers.

Brent and Martha have something to smile about

But the latest surge in its share price has more to do with a swirl of rumours going around City dealing rooms that the company is about to be bought up by a US rival.

It seems there has been no takeover offer just yet, as the company would by now have been obliged to disclose any such approaches under stock market rules.

But still the rumours persist.

The speculation reflects a widespread view that Lastminute has now grown to a point where it would make a highly attractive target to US holiday firms wishing to expand their presence in Europe.

"It would make sense because the traditional package holiday market has been in decline for some years, while online travel is a growth market," says Rachael Waring, retail analyst at Numis Securities.

"And the European online market is growing at a much faster pace."

Takeover trail

Potential buyers will have been encouraged by Lastminute's recent round of acquisitions, which have given it much-needed size and scale in Europe.

Its takeover in March of car rental broker Holiday Autos, which will allow it to bundle together air travel, accommodation, and car hire services, was seen as a particularly astute coup.

Lastminute has also surprised its detractors by keeping a firm grip on its finances.

The company is losing money again after turning in its first ever quarterly profit in the three months to September 2002, but it is still expected to finish the current financial year between �6m and �8m in the black.

It could all be just speculation, no more than that Rachael Waring, Numis Securities

Finally, the Lastminute brand, now one of the best known in the travel industry, has become a prized asset that many rivals would be keen to get their hands on.

Caution

A number of US online travel firms, including Expedia and Travelocity, have been named as possible suitors, as has Cendant, the owner of the Avis and Budget car rental chains.

Of course, there is a strong possibility that the much-anticipated takeover offer will never materialise.

Persistent rumours earlier this year of an imminent approach from TUI, the owner of Thomson Travel, came to nothing.

"It could all be just speculation, no more than that," cautions Ms Waring.

But one thing's for sure.

Lastminute's founders, Martha Lane Fox and Brent Hoberman, will take comfort from the recent flurry of investor interest.

The company's achievements to date may have fallen short of the extravagant expectations fostered during the height of the dot.com frenzy.

But if the firm is sold at a good price to a larger competitor, barely three years after its stock market launch, it will have followed to the letter the classic blueprint for the successful start-up.