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Burberry jumps 5% on takeover talk but FTSE falls after Chinese data

Discussion in 'Market News' started by Lily, Mar 8, 2016.

  1. Lily

    Lily Forum Member

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    Mystery investor said to have built up stake in luxury goods group

    As markets fall back after poor Chinese export figures, Burberry is bucking the trend following reports the luxury goods group is preparing defences against a possible bid.

    A mystery investor was reported to have built up a near 5% stake in Burberry through HSBC. The Financial Times said (£) the move had prompted the company to ask its advisors, Robey Warshaw and Morgan Stanley, to investigate and help it fight off any takeover attempt.

    It appears that Burberry’s challenging trading conditions in the Asia-Pacific region which have weighed on its top line for at least 18 months and pushed the stock down 40% last year (though the shares have since recouped some of that) have attracted opportunistic interest.

    Burberry could amount to a prize acquisition for what we would regard as its ‘ideal’ buyer: one with the longest possible horizon with respect to Burberry’s largest non-domestic markets.

    As the so-called “mystery” HSBC stake of around 5% in Burberry has been around for some time and includes their fund management holdings, it is not clear why Burberry are on takeover alert, but the City has taken no chances and pushed the share price up.

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