The self-professed “cheeky web site about deals” said two unnamed inside sources claimed Coach had been talking to financial advisers from Evercore for several weeks about a potential merger that would create a US$20bn luxury clothing behemoth.
Shares in Burberry rose 49p to 1,499p in London on the rumour; the Betaville report claimed senior executives from both companies had met over the summer to discuss a deal worth around 1,850p per Burberry share.
The British trench coat maker’s lustre has faded lately, after a slew of profit warnings, and with the value of sterling sliding, an opportunistic bid from an international rival sounds feasible.
Representatives for Burberry and Coach declined to comment when asked by the Bloomberg news agency, but the Reuters news agency found inside sources – presumably different ones to the ones Betaville claimed whispered in its ear – who, anonymously, poured cold water on the rumours.
“This is completely speculative. There are no negotiations underway, Burberry is not talking to Coach,” Reuters quoted one anonymous source as saying.
The other source was sceptical as the two companies pursued very different strategies, Reuters reported.
“Both firms have a strong foothold in China, where slowing demand has weighed on sales in the past couple of years, but have complementary business models in the US and the UK,” noted Jasper Lawler, a market analyst at CMC Markets.
Shares in Coach were off 0.5%, in line with the wider market, at US$35.74 in early deals.
Story by ProactiveInvestors