Clothing manufacturer William Baird has today confirmed that it is in talks with a potential takeover bidder. But Marchpole has issued a statement denying its involvement in a possible deal.

Speculation arose over the weekend that Marchpole, the licence holder for Yves Saint-Laurent clothes in the UK, was about to take over William Baird in a deal valued at £70m. Shares in William Baird closed at 60.5 pence on Friday, valuing the company at £71m.

Today, Lazards issued a statement on behalf of William Baird confirming that the company was involved in discussions over a possible takeover bid. Lazards said that if the takeover did go ahead it would be on the basis of 75 pence for each ordinary share. That would value the company at £88m.

Lazards refused to reveal the identity of the potential buyer. Marchpole has since issued a statement denying that it is involved in any talks with William Baird, leaving the identity of a possible bidder open to speculation again.

William Baird was Marks & Spencer's fourth biggest supplier before it became a victim of the retail chain's need to cut costs in the face of fierce competition and falling profits.

The company's contract with Marks & Spencer ended earlier this year, leading to the loss of 4,000 jobs. It still, however, makes clothes for Planet and Precis Petite, as well as manufacturing sportswear and rainwear.

By Clive Hinchliffe