The former chief executive of AOL, the internet provider, is drumming up interest from investors for a bid for all or part of Yahoo!.

Jonathan Miller, who was credited with turning around AOL's fortunes before he was ousted in November 2006, is talking to private equity investors and sovereign wealth funds in an attempt to put together a bid worth $20 to $22 per Yahoo! share. Shares in the internet search engine rose more than 9 per cent to $11.74 after news of the potential offer and were trading up 6.5 per cent at $11.46 at 2pm yesterday.

Speculation about the possibility of a bid for Yahoo! has been rife since Microsoft withdrew its $47.5 billion, $33-a-share offer in May. Jerry Yang, then the chief executive, and the Yahoo! board rejected the Microsoft offer as too low.

Mr Miller's potential offer would value Yahoo! at between $28 billion (£18.8 billion) and $30 billion. Yahoo!'s shares have since fallen to less than a third of the Microsoft offer. Mr Miller is thought to have discussed his plans with some Yahoo! board members but the prospect of an offer has not yet been discussed officially.

The former AOL boss, now a full-time investor, was on the verge of being appointed to the board of Yahoo! in August, before Time Warner, the owner of AOL, used a non-compete clause in Mr Miller's contract to prevent him from taking the job.

The prospective appointment had been a popular one with investors. As chief executive of AOL from 2002 to 2006, he was credited with turning AOL from a subscription-based internet provider to a more advertising-driven model. He also oversaw a key agreement in which Google paid $1 billion for a 5 per cent stake in AOL.

Mr Miller was replaced at AOL by Randy Falco, previously the president of NBC Universal Television, after Time Warner reportedly became concerned that the incumbent's operational abilities did not match his strategic strengths.

AOL is also thought to have held talks with Yahoo! as recently as October, when the companies are understood to have discussed the possible integration of overlapping divisions.

Mr Yang, a founder of Yahoo!, stepped down as chief executive last month amid shareholder pressure after his failure to deliver a deal with a rival.

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