Shares in Sainsbury's rose 2.2% to finish on a nine-year high of 522.5p yesterday amid continuing speculation that the supermarket chain could be the subject of a bidding war.

Talk in the City focused on Marks & Spencer, which yesterday said it did not intend to make an offer for Sainsbury's - just hours after Stuart Rose, chief executive of the retailer, said he was considering a bid.

“The statement does not close off many, if any of M&S' options,” said Steve Davies, an analyst at Numis. “It prevents them from making a hostile bid, which was highly unlikely anyway, but it does show that private equity might not have it all their own way.”