Business

Hermes shares slide after LVMH rules out takeover bid

Hermes store
Image caption Hermes saw profits surge last year on the back of demand for luxury goods in developing markets

Shares in French luxury goods group Hermes have fallen more than 5% after rival LVMH said it had "no intention" of launching a takeover bid.

There had been widespread speculation that LVMH, the world's largest luxury goods company and owner of Louis Vuitton and Moet & Chandon champagne, may make a bid for Hermes.

LVMH's denial was sparked by reports on Thursday that a takeover bid was imminent.

It already owns about 20% of the group.

"The LVMH group has absolutely no intention of making a bid for Hermes," a spokesman for the company said.

Record revenue

Sales at both groups have risen sharply, partly thanks to surging demand in developing economies such as China.

Hermes made a net profit of 421m euros ($610m; £374m) in 2010, a rise of almost 50% on the previous year, with sales rising by a quarter to 2.4bn euros.

It plans to open 13 new stores this year.

LVMH saw record revenues of more than 20bn euros in 2010, with operating profit up by almost a third.

Earlier this year, the group agreed a 3.7bn euros deal to take over Italian jeweller Bulgari.

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