Pace Microtechnology today saw its share price jump as it played down suggestions that computer boss Sir Alan Sugar is lining up to take over the business.

Amstrad boss Sir Alan has reportedly been buying shares in troubled Pace with a long term view to buy the Saltaire set-top box manufacturer.

Pace, whose share price has plummeted by 98 per cent in the last three years, is now valued at just £43 million.

Today its shares were up 3p in early trading at 21p per share.

It has been hit by a downturn in the worldwide use of set-top boxes to access satellite, cable and digital TV channels.

According to reports, Sir Alan has been "secretly buying up shares in Pace'', which is Europe's largest manufacturer of television set-top boxes.

An Amstrad spokesman could neither confirm or deny that his boss had been snapping up shares and Helen Kettleborough, head of corporate communications at Pace, dismissed the reports as "highly speculative''.

She said: "Under the Stock Exchange listing rules, you have to declare if you own three per cent of a company. The story is pure speculation.

"If there were companies interested in a takeover bid, we would have to declare that.''

Today Nick Hewer, spokesman for Amstrad and Sir Alan, said he was unable to say whether he had bought any shares or had designs on the Saltaire company.

"I could not comment on whether he has bought any shares at all, we will have to wait and see,'' he said.

"I have no indication on whether he plans to take over Pace in the future. The company can neither confirm nor deny this.''

Pace had to post a half-year £15.9 million loss to November last year, when its turnover sank by 61 per cent.

In the six months to November 2001, the company's turnover was £215.8 million, but slumped to £83.4 million in the same period in 2002.

As well as its Saltaire HQ, Pace has operations in France, Spain, Germany and Hong Kong.

In May 2001, Pace Microtechnology bosses announced the axing of theSaltaire manufacturing plant, with the loss of 470 jobs.

This was followed in May last year with 180 redundancies and warnings that more of its Saltaire staff could go if business did not pick up.

The company currently employs about 800 staff, with 600 of these working at Salts Mill.