Former Sen. Dan Coats (R-Ind.), who preceded Sen. Evan Bayh (D-Ind.), will challenge his successor, an Indiana news source reported Tuesday. 

Howey Politics Indiana told of Coats' surprising entry into the race:

The source, former aide Curt Smith of the Indiana Family Institute, said that Coats knows he has about two weeks to gather the 4,500 signatures - 500 per Congressional district -- in two weeks.

Coats was up for re-election in 1998 when he decided to retire, citing the pressures of constant fundraising. Bayh went on that year to defeat former Fort Wayne Mayor Paul Helmke to reclaim his father's Senate seat.

Before Coats' announcement, the GOP experienced trouble fielding a strong candidate to face the centrist Bayh.

Republicans last Tuesday lost a potential contender, House Republican Conference Chairman Mike Pence (R-Ind.), after he announced he would not enter the 2010 Senate contest. 

Pence is a favorite of the conservative movement and was seen as a tough loss for the GOP. But in Coats, they receive a potentially strong candidates who has name recognition amongst Hoosiers.

Here is more information about Coates, courtesy of Howey:

Coats was almost named President George W. Bush's Defense Secretary instead of Donald Rumsfeld, and later was named ambassador to Germany.

Coats would join the Republican field that includes State Sen. Marlin Stutzman, plumber Richard Behney, former Congressman John Hostettler and Winchester financier Don. Bates Jr.