The founders of the Ottakar's bookshop chain are planning to take the company private seven years after floating on the stock market. The chain has struggled with tough trading conditions this year.

The announcement, sparked by a rise in the company's shares, led to speculation that competing offers could be tabled by rival bookshops such as Waterstone's, part of the HMV entertainment group, and the US chains Borders, which also owns Books Etc, and Barnes & Noble.

The shares, which were floated in 1998 at 153p, rose 45.5p to 326.5p, valuing the 135-store business at about £70m. Last summer they traded at more than 400p.

The company issued a profits warning in January and reported a fall in sales in March and again last month, when it was hit by poor sales of the new Harry Potter. This was despite rebranding itself for publication day as Pottakar's.

Three directors are involved in the possible deal, including the managing director, James Heneage, who founded the business in 1987 with the chairman, Philip Dunne, who is also the Tory MP for Ludlow.

Michael Hitchcock, the finance director, who joined the board in January, is also a member of the buyout team, which is understood to be taking advice from the corporate finance boutique Hawkpoint.

As the chairman is, somewhat unusually, part of the buyout team, the non-executive directors have formed an independent committee, led by John Thornton, a founding member of the chocolate company, to consider any offers.

The management team of Ottakar's together owns 15% of the shares. Two City investors - Morley, the fund management arm of the insurer Aviva, and Framlington - own 16% and 14% respectively. Framlington was not available for comment yesterday but Morley said: "We look forward to engaging with the independent non-executives and executives to ascertain what would be a fair price."

City sources said there may be scepticism from investors about the timing of the buyout, which some suggested was intended to flush out a trade buyer.

The offer is believed to have been pitched between 320p and 340p although the announcement to the stock exchange yesterday gave no indication of a valuation.

Analysts at the stockbrokers Numis said: "We suspect that any bid would have to come in above 340p to be of real interest to shareholders. Indeed, our initial modelling suggests that a private equity house could pay significantly more than this [more than 400p], assuming Philip Dunne and James Heneage roll over their combined stakes."