The report in Danish daily Jyllands-Posten fuelled speculation that Torm was in play, and the stock jumped as much as 19.6 percent, but eased off their peak to trade up 15 percent by 0904 GMT.

Jyllands-Posten said that Fredriksen's tanker shipping group Frontline had bought a stake in Torm, but Frontline's chief executive denied the report.

"That is not correct," Frontline CEO Jens Martin Jensen told Reuters. "Frontline has not bought shares in Torm."

It remained unclear if another Fredriksen controlled company had bought any shares in Torm, and Fredriksen's representative could not be reached immediately for comment.

A Torm spokesman said the company was not aware that any investor had taken a stake in it above the 5 percent limit that would trigger an obligation to flag the stake.

"The moment that we receive notification that someone has crossed the 5 percent limit, we will inform the market," Torm's investor relations chief Sune Sturup Mikkelsen told Reuters.

Torm shares plunged nearly 19 percent on March 10 after the company reported a pretax loss of $136 million for 2010 and forecast more losses for 2011, and the stock remains 23 percent below its March 9 closing price.

Torm has two big shareholders, Beltest Shipping Company of Cyprus with a 32.2 percent stake and Menfield Navigation Company of Cyprus with 20.0 percent, according to its website.

The Torm Foundation with a 6.3 percent stake is the only other shareholder on record with more than a 5 percent holding.