Home emergency cover provider Homeserve Plc has approached household appliance warranty company Domestic & General regarding an offer for the business.

Discussions are said to be in preliminary stages and no details of the potential value of a deal or methods of funding have been released.

Analysts have described the companies as a good fit, but have warned of potential regulatory difficulty. A deal is thought to be a good move for Homeserve, promoting its policy to supplement organic growth with acquisitions.

Domestic & General has declined to comment, but a statement on the company's website confirms the approach, stating: "Domestic and General plc notes the announcement made this morning by Homeserve plcand confirms that it has recently received an approach from Homeserve plc inrelation to entering into discussions which may or may not lead to an offer.

There is no certainty that the approach or any discussions will lead to an offer. "or any transaction."