Rumors that Burberry Group UNSP ADR EACH REP 2 ORD (OTCMKTS:BURBY) and Coach Inc (NYSE:COH) are merging are just that, rumors.
Burberry has refused to comment on the matter. However, unnamed insider sources claim that rumors of Burberry and Coach being in talks for a merger are false. One of the sources said there are no active talks between the two companies and the other said they have two different strategies.
Luca Solca, an Exane BNP Paribas analyst, agrees with this sentiment.
“Contrary to Coach, most of the efforts at Burberry in the past 20 years have gone in the direction of elevating the brand and moving it into mega-brand price territory, rather than squarely into accessible luxury. A merger of Coach and Burberry would primarily be a merger of problems.”
Rumors that Burberry and Coach were in talks for a merger were started by financial blog Betaville. It released a piece on Friday morning that claimed insider sources said the deal was in the works, reports Reuters.
BURBY stock was on the rise after the news spread and still remains up. COH stock spiked early in the morning, but fell shortly afterwards to below yesterday’s closing price.
Burberry has been preparing for a possible takeover bid of its company. It started the process earlier this year after an unnamed investor built up a 5% stake in the company. BURBY reached out to advisors at Robey Warshaw for help in setting up a defense.
BURBY stock was up 3% and COH stock was down slightly as of Friday morning.
