Burberry Sheds Value on Moncler's Rejected Buyout Offer

Amidst Acquisition Deal Rumors, Burberry Loses Market Value

London, Oct 11 (Reuters) - Burberry shares dropped by 10% on Tuesday after French luxury conglomerate Moncler announced its decision not to pursue a potential acquisition of the British fashion house.

Reasons for Moncler's Decision

Moncler cited rising interest rates and inflationary pressures as primary factors influencing its decision to withdraw its interest in Burberry. The company expressed concerns about the challenging macroeconomic environment and its potential impact on the luxury goods sector.

Reports of a potential acquisition first emerged in September, sending Burberry's shares soaring. However, Moncler's announcement sent the stock plummeting, with investors expressing disappointment over the failed deal.

Burberry's Response

In response to Moncler's decision, Burberry's CEO Jonathan Akeroyd emphasized the company's strong financial performance and strategic plan to drive future growth.

Akeroyd stated: "We are focused on executing our strategy, which is delivering strong results. We are confident in the long-term prospects of Burberry and our ability to create sustainable value for our shareholders."

Analysts' Perspectives

Analysts remain optimistic about Burberry's prospects despite the failed acquisition. They believe the company has a solid brand reputation and a loyal customer base.

However, some analysts caution that the withdrawal of Moncler's offer highlights the challenges facing the luxury goods sector in the current economic climate.

Impact on Burberry's Shares

The rejection of Moncler's acquisition proposal sent Burberry's share price down by 10% on Tuesday. The stock closed at £17.20, its lowest closing price since March 2023.

Analysts predict that Burberry's share price may continue to face volatility in the short term until the economic outlook becomes clearer.

Key Takeaways

• Moncler has decided not to acquire Burberry.
• Burberry's share price dropped by 10% on Tuesday.
• Analysts remain optimistic about Burberry's long-term prospects.