Chrysalis is in early stage talks with US-based label Bug Music about acquiring the music publishing group behind Blondie, Estelle and Nerina Pallot, The Times has learnt.

Following a share price jump yesterday, Chrysalis announced today that it is in “very tentative talks” with a number of potential buyers. It is believed that the group has also spoken to Primary Wave, another US-based music label, about a possible acquisition or merger.

Major music groups such as EMI, whose bid for the group was rejected in April, Warner Music and Universal are not believed to be interested in acquiring the group, although Sony ATV may still take a look. Sources at all groups, including Bug Music and Primary Wave, refused to comment.

Chrysalis said in a statement: “Such discussions are at a very preliminary stage, and there can be no certainty that any offer or transaction will be made, nor the terms on which any offer or transaction would be made. A further announcement will be made when appropriate.”

Shares in Chrysalis, which have this year fallen about 61 per cent, yesterday closed up 14.5p, or 14.25 per cent at 116.25p.

In April, Chrysalis said that it had rejected a bid from EMI and ended talks with other potential buyers, blaming the credit crunch for hampering suitors' ability to offer good enough bids. Bug Music also made an approach at the time.

Chris Wright, the chairman, and founder of Chrysalis, said last November that he was selling “a jewel of a business”, although he expressed scepticism at the time about his prospects of receiving an attractive enough offer in a difficult climate.

Chrysalis’s roots stretch back to a tiny flat in West London in 1967, when former university social secretaries, Chris Wright, then 22, and Terry Ellis, 23, linked their flair for managing and booking bands to form the Ellis Wright Agency.

Among the duo's early management clients were Blackpool soul band that evolved into Jethro Tull. In 1968, the duo signed a licensing deal with Island Records with the promise that, should Wright and Ellis' acts log an agreed number of hits, then the pair would be awarded a label in their own right. Within a year a new independent record company - Chrysalis - was formed.

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