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Gap Call Trading Jumps on Takeover Speculation Denied by H&M

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Call Trading Surges to Seven-Month High
Clothes are displayed during a media preview for the Gap Flagship Ginza store in Tokyo. Photographer: Tomohiro Ohsumi/Bloomberg

May 4 (Bloomberg) -- The operator of Sweden’s H&M clothing chain said there was “no basis” to speculation it would bid for Gap Inc. after bets on a potential takeover lifted the apparel chain’s call-options volume to a seven-month high.

More than 52,000 calls to buy the stock changed hands, 22 times the four-week average and 6.8 times the number of puts to sell. The shares rose as much as 3.5 percent to $23.73, the highest intraday level in a year, before closing at $23.13. The most-active contracts were May $25 calls, which jumped 64 percent and traded 15,821 times.

Traders bet that H&M’s Stockholm-based parent, Hennes & Mauritz AB, may bid for the largest U.S. apparel chain, said Jamie Lissette, founder of Hammerstone Group, a Westport, Connecticut-based operator of online discussion forums for investors.

“There’s no basis for this rumor,” said Haacan Andersson, an H&M spokesman. Louise Callagy, a spokeswoman for Gap, said the San Francisco-based company doesn’t comment on rumors or speculation.

To contact the reporters on this story: Jeff Kearns in New York at jkearns3@bloomberg.net; Matthew Townsend in New York at mtownsend9@bloomberg.net

To contact the editors responsible for this story: Nick Baker at nbaker7@bloomberg.net; Robin Ajello at rajello@bloomberg.net

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