Dillard's Inc. rallied as much as 11 percent on revived speculation the department store chain will be sold in a leveraged buyout, traders said.

Dillard's Class A shares gained $2, or 8.2 percent, to $26.40 as of 4 p.m. in New York, and earlier rose as high as $27.20. The shares have fallen 30 percent since July 19, when the Standard & Poor's 500 Index reached a record.

"There was chatter of a (leveraged buyout) with no names attached," said Michael James, senior equity trader at Wedbush Morgan Securities in Los Angeles.

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Dillard's spokeswoman Julie Bull wasn't immediately available to comment.

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