Paris - Shares in luxury goods makers Hermes and LVMH rose sharply on Monday after LVMH revealed it had built up a 17.1% holding in its smaller rival and said it was not planning a takeover.
The holding, announced on Saturday, raises questions about LVMH's strategy in buying a minority stake in the family-controlled maker of printed silk scarves and how it managed to acquire the holding at a price significantly below the market.
Some analysts suggested it was possible that LVMH, which owns leather goods maker Louis Vuitton, had built up its position via options.
Hermes shares, which rose nearly as much 9% at the start of trading and have gained 90% since January 1, were up 7.7% at €189.8 and LVMH shares were up 3.7% at €117.5 by 10:12.
"Given the price paid and the quality of the asset, we believe the market will view this as a good allocation of capital, despite expectations of a potential return of cash or capital (for LVMH)," Nomura said in a note on Monday.
The holding, announced on Saturday, raises questions about LVMH's strategy in buying a minority stake in the family-controlled maker of printed silk scarves and how it managed to acquire the holding at a price significantly below the market.
Some analysts suggested it was possible that LVMH, which owns leather goods maker Louis Vuitton, had built up its position via options.
Hermes shares, which rose nearly as much 9% at the start of trading and have gained 90% since January 1, were up 7.7% at €189.8 and LVMH shares were up 3.7% at €117.5 by 10:12.
"Given the price paid and the quality of the asset, we believe the market will view this as a good allocation of capital, despite expectations of a potential return of cash or capital (for LVMH)," Nomura said in a note on Monday.