M&S informed the Stock Exchange that Franklin Resources had declared its stake after passing the 3 per cent limit that triggers the need for disclosure.
Shares rose 6p or 1.6 per cent to 366.5p, in line with the surge in the FTSE-100 index yesterday.
The news comes just weeks after rumours swept the market that Warren Buffet, the famous US investor, was building up a stake in a UK company, possibly M&S. The target turned out to be Allied Domecq.
A spokeswoman for M&S said Franklin Resources had given it a list of the institutions on whose behalf it had bought shares, which included Merrill Lynch and Morgan Stanley.
The company issued a section 212 notice that will force all the named institutions to reveal if they are buying on behalf of an institution that may be planning a bid.
But one analyst, who asked not be named, said she doubted the move was a first step towards a hostile bid. "Their investment methodology means they have seen the share price fall on the screen. It is not a surprise in as much as there has been talk of someone building up a stake."
M&S shares have dropped from a peak of 547p in the wake of a 40 per cent slump in profits and a boardroom row over succession to the post of chief executive.
Franklin Resources is a global investment management organisation based in San Mateo, California. It includes the Franklin Templeton mutual funds and institutional accounts.