Shares in U.K. retailer Sainsbury surged on Wednesday after market sources said a block of shares worth 14% of the company or 1.35 billion pounds ($2.7 billion) changed hands.
Traders cited market talk that Qatari investment group Three Delta was buying shares in Britain's number three supermarket group that fought off a private equity bid just two weeks ago.
Market sources said the block of some 250 million shares was traded in early morning trade pushing Sainsbury shares up nearly 7%.
Alliance Bernstein held about 254 million shares in Sainsbury, according to Reuters data. It declined to comment on speculation it had sold its stake to the Qataris.
"The dawn raid in Sainsbury is fuelling bid talk," said one trader. Sainsbury was the biggest gainer in the FTSE 100 index in early trade on Wednesday.
Three Delta is a vehicle of the Qatari royal family, who already hold around one percent of Sainsbury, through its Delta Two vehicle, according to stock market filings.
Spokesmen for Three Delta and Sainsbury's declined to comment. Hussein al-Abdullah, executive board member at the Qatar Investment Authority also declined to comment.
Seymour Pierce analyst Richard Ratner said he did not believe the stake building was a prelude to a bid but a lever to force the Sainsbury board to unlock value from its 8 billion pound property portfolio.
Property tycoon Robert Tchenguiz with a 5.07% Sainsbury stake has already said he wants the supermarket chain to adopt some private equity-style manoeuvres and release more value to shareholders from its real estate assets.
Sainsbury shares closed up 7.2% at 568 pence per share, outperforming a 0.6% rise the DJ Stoxx index of European retailers. At Tuesday's closing price, 250 million shares is worth 1.35 billion pounds.