Analysts say a buyer would have to pay around £80m for Sytner. They believe Inchcape Group, which paid £22m for Bates Group last year, is a likely bidder.
There is also City speculation that America's £425m turnover UnitedAuto Group might be a contender. UAG has bought two Mercedes-Benz dealerships, at Milton Keynes and Kettering.
Sytner's business has been built on holding franchises for BMW, Mercedes-Benz and Jaguar. Shares in Sytner rose by 29.5p to 271.5p yesterday which led to the group issuing a statement to the stock market about a possible acquisition.
The statement confirmed Sytner was in discussion with an unnamed party. In the year to February 28, 2001, Sytner made pre-tax profits of £6.9m.