Burberry Stake Disclosure Said Sparked by Trades, Not Suitor

Someone Might Be Looking to Bid on Burberry
  • Shares of fashion retailer fall 6.8% in London trading
  • U.K. fashion house said not to have received takeover approach

HSBC Holdings Plc’s disclosure that it held 5 percent of Burberry Group Plc’s shares was part of a series of trades rather than a single bidder building a stake in the U.K. fashion retailer, according to people familiar with the matter. The shares fell on the damped takeover speculation.

HSBC triggered the regulatory disclosure last month after executing trades for a number of clients that briefly took its total holdings above the 5 percent threshold, said the people, who asked not to be identified as the matter is private. Burberry hasn’t received any takeover approach, the people said.

Burberry shares fell as much as 6.8 percent in London, the most in almost five months. That erased the gain on Tuesday after the Financial Times reported Burberry was girding itself for a potential takeover. The FT said that Burberry had sought help from HSBC and advisers Robey Warshaw to identify a “mystery” investor that built a stake.

On Feb. 15 HSBC reported a holding of 5.4 percent, which has since declined below the disclosure threshold. Burberry asked HSBC, which is the custodian for the stake, to identify the client, the FT reported. Separately, on Wednesday HSBC’s research arm cut its recommendation on Burberry’s shares from buy to hold, saying that the recent rally in the shares was overdone. The stock had advanced 22 percent before Wednesday.

Representatives for Burberry and HSBC declined to comment.

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