The private equity firm has been quietly building up its stake in the UK retailer over the past six months.
At close yesterday, Marks & Spencer shares had fallen by 21p to 611p.
Baugur's profit is believed to be£50 million, which is expected to be used to further build its stake in department store group House of Fraser. It acquired a 9.5 per cent stake in House of Fraser last month, fuelling speculation of a takeover bid.
Seymour Pierce analyst Richard Ratner said: 'Baugur's rumoured sale of its stake in Marks & Spencer at a profit of£50 million reinforces our view that it is very likely that the initial approach to House of Fraser will result in an offer being made for the company.'
Baugur already has a strong presence on the UK high street. It owns names such as Oasis, Karen Millen and Hamleys. It also has a 10 per cent stake in Woolworths and a 14 per cent holding in fashion chain French Connection.
Baugur and Marks & Spencer both declined to comment.
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