Shares  in e-learning group Riverdeep doubled in value at one stage yesterday as chairman and chief executive Mr Barry O'Callaghan weighed up the prospect of taking the company private.

The company issued a statement as the stock exchange opened yesterday, stating that Mr O'Callaghan had made an approach which might or might not lead to a bid for the company.

The news came just days after the company shed 32 per cent of its value following a poorly received conference call by the company at which Mr O'Callaghan refused to take questions on guidance issued in the wake of well-regarded third-quarter figures.

Analysts said any bid for Riverdeep would need to be above €2. Stockbroker NCB said a sum of the parts valuation for the group would be €1.45 and that any bid would have to offer a premium to that price. Even at €2, most shareholders would still be out of pocket. As recently as last March, the company was trading at €4.90.

The company's stock took off in morning trade hitting €1.55 from its Friday close of 75 cents. It later fell back to close at €1.32. More than 5.6 million shares traded.

Sources close to Mr O'Callaghan said his move came against a background of mounting frustration at the refusal of the market to give the company a rating it deserved. Just six weeks ago, the company delisted from the Nasdaq in an effort to escape the attention of short-sellers who, the company said, were undermining its value. However, the company's share value has continued to suffer. At the time of the Nasdaq delisting, the share was trading at €1.15; by last Friday that had fallen to €0.75.

"Riverdeep is fast growing, profitable and a market leader," said one source close to the company. "Barry has delivered the numbers and, consistently, the market has not rewarded that performance."

The devaluation of the company on the markets was depriving it of the currency to make and integrate the acquisitions that were key to its development, it was claimed.

It is thought likely that Mr O'Callaghan will work eventually with Riverdeep founder Mr Pat McDonagh, who still holds around 23 per cent of the company, in any takeout of the group. For now, Mr McDonagh remains an independent director.

Analysts in Dublin said that, if serious, the move was very difficult for long-term shareholders. They questioned the timing - just weeks after the delisting and at a time when the share is suffering from uncertainty and the effects of the US economic downturn.

"This is not in shareholders' interests," said one. "One has to question why the company would be taken from shareholders at the worst moment from their point of view. Looking at it from the US, this is bad for Ireland Inc on the back of Elan, AIB and Baltimore."

Mr David Rocker, of US hedge fund Rocker Partners which has been selling short on Riverdeep, was dismissive of the latest move. "If he is interested in serving the shareholders, who have entrusted him with their investment, he should be doing things to improve the liquidity of the company," he said. Instead, it had delisted from the Nasdaq, cutting liquidity.

"Anyone would be sceptical," said Mr Rocker.