The telecoms giant rose 6% to 197.7p in early trading after an FT Alphaville report said Verizon and AT&T are working on the “biggest M&A deal ever”, pitched at a 40% premium to Vodafone’s Friday closing price of 186.6p a share.

Vodafone’s jump helped push the FTSE 100 up 0.9% to 6,468 by mid-morning.

The mooted deal, which would give Vodafone an enterprise value of roughly $245bn, would resolve growing speculation over the future of the company’s joint venture with Verizon.

Vodafone shares have now risen almost 27% this year as investors become convinced the Verizon issue is coming to a head.

The stock rose 6% on 6 March on talk of an end to the joint venture or full-blown merger with Verizon.

Long a favourite of UK equity income managers, Vodafone’s stake in Verizon Wireless enabled it to pay out a £2.2bn special dividend in Q1 last year, helping it become the largest UK dividend payer in 2012.

A total gross payout of £7.4bn for 2012 beat out the £7.2bn paid by oil major Shell, according to the Capita Dividend Monitor.