LONDON — European stock markets were down in midmorning trading on Tuesday, while Burberry Group’s stock rose 5 percent to 14.40 pounds following speculation in the Financial Times about a possible takeover.
The CAC 40 in Paris led the slide, falling 1.4 percent to 4,381.40; while the DAX in Frankfurt fell 1.3 percent to 9,648.96, and the FTSE MIB in Milan was down 1.2 percent to 17,843.74. The FTSE 100 in London edged down 0.9 percent to 6,127.26.
The euro traded at $1.10, while the pound fetched $1.42 and the Swiss franc equaled $1.00 at 11:15 a.m. CET.
Burberry’s stock rose after the Financial Times reported the company had consulted its advisers about potential takeover bids after a mystery investor built up a stake in excess of 5 percent, which was disclosed in February. Earlier this month, however, the mystery investor’s stake fell below 5 percent to 12,917,297 shares, according to papers filed with the London Stock Exchange.
HSBC, which acts on behalf of the investor, has so far declined to reveal its client’s name to Burberry.
Burberry is often the subject of takeover speculation in the financial pages of the British press. The company declined to comment on the FT report on Tuesday.
Over the past year Burberry, like other fashion and luxury houses, has been grappling with slowing growth in key markets, uneven tourist patterns and an overall tough economic backdrop. It has also been looking to cut costs as it manages the business in the new macroeconomic reality.
Burberry’s share price has fallen nearly 25 percent over the past year and, unlike other luxury goods groups, it has no family member stakeholders. It does not belong to a conglomerate, all factors that make it an appealing takeover target. The company’s market capitalization is currently 6.3 billion pounds.
Other stocks on the rise in midmorning trading on Tuesday were Luxottica Group, 2.6 percent to 50.10 euros; Hugo Boss, 2.5 percent to 55.37 euros, and Tesco, 2.7 percent to 1.97 pounds.