Sainsbury's stock market value soared by more than £1 billion as it emerged that a supergroup of private equity big boys, including CVC Capital Partners, Kohlberg Kravis Roberts, Blackstone Group and Texas Pacific, was sizing up the chain.
The most popular post-takeover scenario would involve Sainsbury's ramping up non-food to take on Tesco in electricals and fashion.
Suitors may also be interested in the 750-store chain's property portfolio, which is believed to be worth £7.5 billion, but Sainsbury's board may decide to sell some of the property itself to fend off a takeover. Shares were up 81p to 516p, giving a market capitalisation of £8.9bn.
Textiles group Dawson International has quit all discussions of an offer for the company after more than two months of talks, but may still sell a stake of up to 29.9% or enter a joint venture. Shares were down 0.875p to 5.875p.
Meanwhile, online fashion retailer Asos.com is to shut down its marketing services company Entertainment Marketing at the end of March. The loss-making division will incur total closing costs of £238,810. Shares were up 3p to 124p.