Someone could be trying to take over Burberry - and it has no idea who
The Financial Times reports that a mystery investor has built a stake of just under 5% in the company, and Burberry is worried they'll try to go for more if it doesn't act now.
The takeover rumours are good news for the brand's other shareholders: the stock jumped over 4% to £14.34 ($20.45) at 9:30am on Tuesday.
The company's market value is now £6.4 billion ($9.11 billion), which is still 22% below what it was a year ago thanks to falling demand in China.
Burberry has called on its current bankers Robey Warsaw, as well as its corporate broker Morgan Stanley, to investigate. HSBC, the custodian of the stake, have so far refused to divulge the identity of the holder to Burberry.UK transparency rules mean that anyone with shares of over 3% must be identified, but investment managers need only declare when they have over 5%, which suggests the mystery holder might be a private equity investment group.
Nick Bubb, an independent retail analyst, says in an emailed statement this morning:
Well, as the so-called "mystery" HSBC stake of c5% 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 by 4% so far after today's press coverage.
Burberry has recently been on a £20 million ($28.5 million) cost efficiency drive, cutting hiring and travel expenses in response to a dropping share price.