Stock in Morvest gained 6.25%, to close at 17c, a cent higher than on Friday, after the company said it was in talks.
Yesterday, it issued a statement to shareholders saying it had entered into discussions that could impact its share price if successfully concluded.
"In the circumstances, shareholders are advised to exercise caution when trading in their Morvest shares until a further announcement is made."
Morvest provides business support services, ICT solutions, and retail and consumer services. It recently bought, through its 50%-held subsidiary ITQ Business Solutions, 60% of iSolve Business Solutions and SQLDB Technology Solutions for R16.2 million.
In the first half of the year, it reported revenue of R473 million, but said continued pricing pressure from the group's existing client base, as well as competition from the aggressive emerging markets, resulted in a decreased margin to 14.1%.
Headline earnings went up to R25.6 million from R25.5 million, translating into a 6.8% jump in headline earnings per share of 5.20c, from 4.87c.
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