ENGINEERING services group Amec was the subject of takeover speculation last night as it was linked to a possible £1.2bn approach.

The group, which employs about 400 people in its industrial and support services divisions in Darlington, is believed to have attracted interest from Spanish building group Acciona.

Amec is an attractive target for potential suitors since it was shortlisted for the contract to manage the construction of the Olympic park in East London, which could be worth up to £170m to the company.

Its buoyant Darlington-based industrial division has also scooped several multi-million pound contracts with the likes of National Grid this year.

The group has also been named joint contractor on Stockton's North Shore development.

Amec's shares rose by as much as six per cent after the Guardian newspaper said an approach had been received from a continental European rival, adding that the board of the UK company may have been discussing the matter yesterday.

An Amec spokesman told The Northern Echo: "We don't comment on market speculation."

But he said the reports in the Guardian were not rumour, but speculation.

Anthony Platts, assistant director of Tees Valley stockbrokers Wise Speke, said: "As with many of these support services companies, it is the forward order book which makes them attractive for takeover and Amec has a very good forward order book."

As well as construction and engineering services, Amec has moved into the nuclear clean-up market as it looks to win a slice of the maintenance and decommissioning contracts due to be put out to tender by the Government.

Amec bolstered this side of its work when it acquired Cheshire-based NNC for £25.3m in June.

Amec employs about 44,000 people in more than 40 countries, generating annual turnover of about £5bn. It also supplies services to the oil and gas, transport, industrial and infrastructure sectors.

Created through a merger in 1997, Acciona works across a range of infrastructure projects and services, but is also a significant player in the renewable energy sector.

In the first nine months of 2005, Acciona reported turnover of £2.37bn and underlying earnings of £359m, an increase of 33.6 per cent on a year earlier. Amec's market value has risen to about £1.2bn, following a share price climb from 328.5p at the end of last month to 373p. The stock closed 1.45 per cent higher yesterday