The Sunday Times reported that Britain's second largest supermarket chain could potentially see bids from suitors such as Apollo (APO) of more than £7bn ($9.55bn).
Stock was 9.3% higher by 9am in London, trading at 321.9p per share.
The interest from Apollo is understood to be exploratory, according to the report.
Analysts were sceptical of the report, with Shore Capital calling it "shallow" and "sensationalist," noting that Sainsbury's has long been considered a takeover target. It also said that it couldn't discount Apollo bidding for the grocer if it wasn't part of the consortium buying out Morrisons (MRW.L).
Sainsbury's shares had headed higher earlier this year as hopes of a takeover offer mounted. The Qatar Investment Authority — its largest shareholder — had sold more than £300m in shares to Czech billionaire Daniel Kretinsky in April.
The potential move follows a slew of private equity deals in the market, with UK grocery chains a particularly attractive target for foreign money.
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On Friday, Morrisons agreed to a £7bn takeover by US private equity group Clayton, Dubilier & Rice (CD&R), which upped its bid for the supermarket chain, taking on rival suitor Fortress Investment Group.
Earlier, CD&R had made an offer of 230p a share, which valued Morrisons at £5.5bn, but this was rejected for undervaluing the retailer. It has now increased its offer to 285p.
Morrisons has accepted the latest offer, which beats competitor bidder Fortress. Apollo had also been in the race in this deal as part of a consortium of bidders.
British companies that have recently fallen to private equity include supermarket Asda, mechanics AA, infrastructure firm John Laing, St Modwen Properties, fund administrators Sanne Equiniti, private jet firm Signature Aviation, insurer LV, aerospace company Senior, and pan-Asian takeaway chain Itsu.
The Morrisons deal was a 60% premium to the share price before the takeover first emerged and is likely to predicate an increased price for Sainsbury's, which is currently valued at £6.9bn.
Once the Morrisons deal closes 1 million British workers will be employed by companies owned by private equity. This equates to about 3% of the UK’s total workforce.
Sainsbury's and Apollo declined requests for comment.
Watch: Morrisons takeover battle heats up as fresh £7bn US takeover offer trumps rival