Shares in Oxford Health Plans ( OHP ) popped Monday following a report that the Connecticut-based company is facing a takeover offer from rival WellChoice ( WC ).

The exact terms of the deal are unknown, but the smaller WellChoice is thought to be offering a 25% premium in an all-stock transaction for Oxford, according to Monday's edition of The Wall Street Journal.

As of Friday's close, Oxford had a market capitalization of about $4 billion. Shares ended the session near a 52-week high of $50.32. New York-based WellChoice shares closed at $37.45, giving it a market cap of $3.1 billion.

Oxford shares were up $5.18, or 10.3%, to $55.50 in premarket trading.

Both companies are major players in New York State and any combination would create a market leader in the region with almost $11 billion in combined revenue, based on 2003 earnings.