Burberry saw an increase in its share price after reports emerged that its Italian rival Moncler may be considering a takeover bid for the British luxury brand.
The British luxury label saw a 7% boost in its share price on Monday after reports emerged that its Italian rival, Moncler, was looking at a potential acquisition deal.
This came after luxury fashion website Miss Tweed reported that Moncler was mulling over a bid for Burberry after it issued two profit warnings amid softening demand in the luxury market.
The head of luxury goods conglomerate LVMH, which is an investor in Moncler was keen to cement a deal with Burberry, Miss Tweed reported citing several industry sources.
LVMH, which owns brands including Dior, Sephora and World Duty-Free, has a 15.8% stake in Double R, the investment vehicle that owns Moncler, making it part of the Italian brand’s board.
Moncler told The Guardian it did not comment on “unsubstantiated rumours”.
The reports come after analysts identified Burberry as a potential takeover target at the beginning of the year, as the company’s share price fell by 40% over 12 months. The British luxury label dropped out of the FTSE 100 index for the first time in 15 years.
Burberry reported a double-digit fall in sales across its core markets in the first quarter of the year and issued a profit warning and scrapped its dividend. Sales in the Americas and Asia Pacific fell by 23%, while sales in Europe, the Middle East, India and Africa dropped by 16%.
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