takeover of UK-listed tanker operator London & Overseas.

Frontline would like to close the deal soon and it would enhance the group's market share while is moves forward with a separate $403 million deal for Swedish shipping company ICB.

By acquiring L&O and chasing ICB, Frontline hopes to emerge as a dominant force in the global tanker market, where there are more than 30 international companies in competition for charter contracts.

According to the Financial Times, Frontline would fund the acquisition of L&O by issuing new paper to the UK group's investors and then would take advantage of its stock market listing in London and New York to delist its own shares from the Oslo Stock Exchange.

Members of the board of directors of L&O said they have responded favourably to the approach from Frontline, formerly a Stockholm listed shipping group which was acquired last year by John Fredrickson, the Norwegian shipping tycoon for $455 million.

Takeovers in the tanker sector have been on the rise since a hike in chartering rates, with the cost of some types of vessels rising more than 30 percent to $55,000 a day over the past three months.

If Frontline is successful in acquiring L&O, it will increase its fleet size by six to 30 ships. Also, the deal would make it the world's second largest independent tanker operator behind the Worldwide group of Hong Kong, with a total of 42 vessels, including new ships on order.