Burberry's share price jumps as mystery investor shops at the luxury group

Kasmira Jefford
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Analysts have suggested that the mystery investor could be an activity investor (Source: Getty)

Burberry lead the FTSE 100 this morning after reports last night that a mystery investor has built up a five per cent stake in the luxury goods company.

Regulatory filings show that the shareholder's stake went over the five per cent disclosure threshold on 11 February, with HSBC acting on behalf of the investor. A separate filing on 4 March shows the stake has since fallen back below the five per cent threshold.

Burberry, which has a market value of around £6.5bn, is now said to be seeking advice from its house brokers Robey Warshaw and Morgan Stanley in the event of a potential takeover bid, according to the Financial Times.

It is not yet clear who the buyer is but Burberry is trying to find out, with the newspaper reporting that it has tried, unsuccessfully, to ask HSBC.

Analysts have suggested that the buyer could be an activist investor looking to shake-up the brand. The luxury goods group has seen sales slow over the past year, hurt by its exposure to a slowing Chinese market, currency swings and concerns surrounding the wider global economic backdrop.

Brewin Dolphin consumer analyst Nicla Di Palma, said: "They would probably focus on faster cost cutting and maybe on removing the current chief executive, who is more a designer than a company manager."

"We await more information. In the meantime, we remain concerned about the high exposure of Burberry to the Chinese consumer (40 per cent of sales) and rate the shares 'underperform'", he added.

Burberry declined to comment.

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