Byline: Katherine Weisman / Wendy Hessen

PARIS — LVMH Moet Hennessy Louis Vuitton confirmed Tuesday that it had cut its stake in Diageo, the world’s largest liquor company, but denied that it had done so to rebuild a war chest for additional acquisitions.
LVMH also confirmed that it was among the companies looking at the the three luxury watch brands of Mannesmann AG, the German conglomerate which has now formally announced its intention to sell Jaeger-LeCoultre, IWC Schaffhausen and A. Lang & Sohne.
“We look at every opportunity, and [the Mannesmann watch unit] is definitely something we’re looking at,” said an LVMH spokeswoman.
LVMH reduced its stake in Diageo to about 3 percent from 6.5 percent by selling 134 million shares at about $8.20 each, generating approximately $1 billion in the process. However, a spokesman for LVMH described the sale simply as “cash management” in response to observations that the move is designed to build up LVMH’s war chest for future acquisitions, including possibly one from Mannesmann. “We didn’t need to sell Diageo to buy something else,” the spokesman said. “We have always considered this a liquid investment.”
He declined comment on LVMH’s interest in the Mannesmann watch brands or on recent reports that the company might be entertaining the sale of its stake in Gucci. Mannesmann’s other suitors are reported to include the Vendome Luxury Group and the Swatch Group.
Sources said the list of bidders talking to Mannesmann might include as many as 22 names, with Rolex and Patek Philippe the most frequently mentioned. Rolex’s former chairman, Andre Heiniger, died in January, and industry insiders have said that now, under the direction of his son, Patrick, the atmosphere in the company is more open to change.
Though speculation exists that Patek Philippe might put in a bid, the firm has never participated or even expressed any interest in making acquisitions.
LVMH holds its annual shareholders meeting here today.