Burberry Mystery Shareholder Revealed

At the beginning of this week, rumours surfaced that Burberry was facing an imminent - and surreptitious - takeover bid, after it came to light that a mystery shareholder had built up a five-per-cent stake in the fashion business. The identity of the shareholder was unknown, with even CEO and creative director Christopher Bailey said to be in the dark - until now.

Rather less intriguing than many had suggested (or perhaps hoped), the investor has been unveiled as HSBC, reports the BoF, which built up the shares as a part of a series of routine trades on behalf of numerous clients as opposed to one solitary investor. Burberry had, in fact, asked the bank to disclose who held the shares "using a section of the Companies Act 2006 that gives public businesses the right to demand to know who is the real owner of their shares", reports The Times. The fact that HSBC didn't respond immediately is said to have contributed to the sale speculation.

In the midst of the mystery, rumours also pointed to the accumulation of shares being a part of an activist campaign (see when PETA acquired a minority stake in Hermes), while various potential suitors, including LVMH, were mooted as possible investors. HSBC's research unit today pointed out that a takeover from the French fashion conglomerate would not make sense.

"The current market capitalisation of Burberry is £6.5 billion, so there are not many theoretical buyers with the financial means to acquire it," it stated. "Regarding the industry leader LVMH - mentioned in the FT.com article as a potential acquirer - we do not believe that it would make sense for the French group to add another fashion and leather brand such as Burberry, given that it already owns several brands in that category: Louis Vuitton, Fendi, Céline, Givenchy, Loewe, just to name the largest ones."

The Times also points out that Burberry is considered "particularly vulnerable to a takeover" given that it doesn't have a "strong single-family stake" like other major fashion houses. After the HSBC revelation today, Burberry's shares subsided, following an initial surge when the rumours came to light.