Toby Courtauld’s Great Portland Estates has emerged as the mystery property company in talks to merge with London Merchant Securities

London Merchant Securities’ shares jumped 10% this morning after the west London office specialist revealed it was considering a merger with a third party.

In response to speculation yesterday that the company was in takeover talks, LMS, which is controlled by the family of chief executive Robbie Rayne, said in a statement to the Stock Exchange this morning: ‘The board of London Merchant Securities notes the press speculation yesterday in relation to a potential offer for the company by a private equity purchaser and a rise in the share price today. The company is not aware of any such offer.

‘However, London Merchant Securities is considering a potential merger with a third party. Discussions are at a very preliminary stage and no merger terms have been proposed by either side. There can be no certainty that any transaction will be forthcoming.’

Sources close to Great Portland Estates admitted the two companies were in early-stage merger discussions designed to 'provide a robust platform for growth' beneficial to both companies.

LMS is the second quoted property company in the last five days to reveal corporate activity. Last Thursday, Grainger Trust revealed it has received a bid approach, thought to have come from Southend-based residential property investor Regis Group.

Having demerged its long-held venture capital arm earlier this year, LMS is now a pure property company with a portfolio valued at more than £1.1bn. More than half of the portfolio is offices, mostly in central London, and a third is retail and leisure assets across the UK.