A Sunday newspaper has reported that US IT giant, Cisco, is poised to make a takeover bid for Marconi.

According to the Sunday Business paper Cisco is considering a £12billion ($17billion) takeover of the UK telecoms equipment company to boost its presence in Europe.

Marconi, which has bases in Coventry in Stoke and Foleshill, recently announced a major restructuring programme which involves making 3,000 people redundant worldwide.

Although Marconi's annual results announced last month showed an 8% profit increase, its share price has continued to be under pressure. On the London Stock Exchange shares closed on Friday down 4% at 338 from a 52-week high of 1250.

On the American IT stocks index NASDAQ the share price suffered a similar percentage fall to $10.00 down from a 52-week high of over $36.

Cisco, a world leader in the internet networking field, has also been hit by the downturn in the IT and telecoms sector. It last month announced its first quarterly loss in eleven years.

In a report to the US Securities and Exchange Commission Cisco revealed that it did not predict any upturn in its market for the "foreseeable future".

According the newspaper report Cisco's chief executive John Chambers is said to have told advisers to delay making an approach to Marconi until the British company has completed its restructuring programme.

The Sunday Business report is based on "unidentified industry sources". Marconi has so far declined to comment on the speculation.

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