Shares in record firm EMI soared 10% after the UK firm said it had received a preliminary takeover approach from an unnamed party.
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The Financial Times had earlier reported that several private equity firms were considering a £2.5bn bid.
EMI, whose artists include The Beatles and Robbie Williams, rejected a takeover approach from US rival Warner Music earlier this year.
EMI is one of the world's four largest music companies.
The firm has struggled to expand its business amid signs that regulators are worried about further consolidation in the global music business.
It failed in its own bid attempt for Warner Music this year and lost out to Universal Music in the battle to acquire BMG Music Publishing.
In a brief statement, EMI said it had received a preliminary bid approach "which may, or may not, lead to an offer being made for the company".
EMI shares shot up 10% to 289.25 pence, some way below the 320 pence per share offer from Warner Music it previously rejected.
The world's four largest music companies - Sony BMG, Warner Music, Universal Music and EMI - control 80% of the global market for recorded music.
Analysts believe further consolidation among the "big four" is on hold pending a decision by a European court on the merger of Sony and Bertelsmann's music arms.
The European Court of First Instance has challenged the European Commission's decision to clear the merger in 2004 and is unlikely to announce its verdict until next summer.
This could open the door to private equity firms, which are believed to have been looking at EMI for several months.
EMI is particularly attractive because it owns one of the world's largest and most valuable music publishing divisions.
At closing, EMI shares on the FTSE index were 10.4% higher.