Vodafone's shares jumped 4 per cent after the chairman of Liberty Global, John Malone, said the two companies would make a "great fit", reigniting long-running merger speculation.

Vodafone, the world's second-biggest mobile operator, has long been linked with a purchase or tie-up with Liberty, Europe's largest cable operator, as the market increasingly moves towards the combination of mobile services with fixed-line broadband.

To bolster its offering, Vodafone has bought individual cable operators in certain European markets but a purchase of Liberty would broaden its fixed-line business in one go.

"We've looked at that from our side and there would be very substantial synergies if we could find a way to work together or combine the companies with respect to western Europe, " Malone told Bloomberg in an interview.

“There’s the promise of creating enormous shareholder value if we could work it out,” Malone said.

Analysts at Jefferies said the comments from Malone indicated a change of tone which could be seen as an attempt to test the reaction of shareholders.

Liberty Global, which is present in 14 countries including Germany, Britain and the Netherlands, has a market capitalisation of $45 billion, while Vodafone has a market cap of £63 billion ($98 billion).

“From a Vodafone perspective, we have argued that a merger with Liberty Global would make sense,” Jefferies analysts said. “If more lukewarm prior statements by Liberty Global had cast undue doubt over the merger scenario, we think these latest statements should remove it.”

On Tuesday, before Malone's comments were published, Vodafone chief executive Vittorio Colao declined to comment on the prospect of a deal with Liberty.

“We have our own strategy, it is an organic strategy,” he said. – Reuters