MARKS & Spencer Group Plc, the UK's largest clothing retailer, rose the most since March 2009 in London trading on speculation the Qatar Investment Authority (QIA) is considering an £8bn (€9.3bn) offer.
The stock gained as much as 9.4pc to 407.4p and was up 7.9pc at 402p at the opening, boosting the company's market value to £6.5bn.
QIA has approached banks and private-equity houses, including CVC Capital Partners, to assemble a group to make a move on the London-based retailer, according to weekend reports, citing senior sources in London's financial district.
No approach has yet been made, it is believed.
Qatar Holding, the investment arm of the Gulf state's sovereign wealth fund, is not considering a bid for the leading British retailer, a source close to the fund said yesterday.
Qatar Holding is the vehicle through which the wealth fund conducts some of its biggest overseas investments.
M&S declined to comment.
Despite the denial from the source, some analysts think M&S, whose core women's clothes business has been losing market share, could be vulnerable to a private equity bid.
"Trading and profits are under pressure, with nothing to show yet for the big investments made in online systems and warehousing and the changes in the clothing team," said independent retail analyst Nick Bubb.
He also noted that from a funding perspective, the recent improvement in the debt markets and the amount of money currently in private equity makes a bid possible.
"From a strategic perspective, however, the question is what anybody thinks could be done with a declining brand like M&S."
One of M&S's top 20 shareholders also said that a private equity-style bid was a possibility.
"You could argue that the business could support quite a bit of debt if it wasn't having to pay a dividend," said the investor.
(Additional reporting, Bloomberg and Reuters)