The stock rose as high 1,204 pence, putting the company's value at 5 billion pounds ($7.9 billion), Reuters reported.
Market players have speculated for months that Burberry would be an attractive target for a buyout as it is one of the few luxury goods companies that isn't controlled by a single family.
"The main attraction is its freefloat and it's not got a controlling family holder. It's the only luxury group that is independent," one trader told Reuters. "It's a good company, actually, very well run."
Not everyone is convinced that a Burberry acquisition makes sense, given that the company's shares have more than doubled in price this year.
"The only bidder I can see paying this kind of multiple is a Chinese (company) looking for a trophy asset," a trader told Reuters.