Burberry shares soared after luxury goods house LVMH acquired accessories giant Bulgari with speculation that the luxury British heritage brand could be the latest to be snapped up.
Burberry’s shares rose by almost 4% to £11.20 yesterday after it was announced that LVMH had agreed to buy the Bulgari family’s 50.4% stake in a share swap and would make a tender offer for the rest.
Citi, the bank, told the Telegraph: “Mid-cap luxury stocks, such as Burberry or Tod’s could benefit from LVMH’s move as it might signal renewed mergers and acquisitions activity in the sector.” However Citi added that LVMH could be one less buyer for Burberry as it beds down the Bulgari deal.
LVMH, the group behind Louis Vuitton and Marc Jacobs, said it would issue 16.5m shares in exchange for the 152.5m Bulgari shares held by the founding family. The Bulgari family will now be the second largest family shareholder in LVMH after chairman and chief executive Bernard Arnault.