LVMH and Richemont have declined to comment on news that Bernard Arnault has bought shares in the owner of Cartier in a private, family, capacity.
Richemont’s share price rose by almost 10% yesterday as markets digested news of the LVMH chairman and chief executive’s investment, but later fell back as analysts concluded that this was not a move towards a future corporate takeover.
LVMH owns TAG Heuer, Bulgari, Hublot, and Zenith. It is also custodian of La Fabrique du Temps, a hothouse factory producing watches for Louis Vuitton, Daniel Roth and Gerald Genta.
Cartier is the jewel in the crown of Richemont, which is also home to Jaeger-LeCoultre, IWC, Panerai and Van Cleef & Arpels.
Britain’s Daily Telegraph reports that the investment is part of a broader family-owned portfolio of investments by Mr Arnault rather than a marker for a future takeover of Richemont.
UBS analyst Zuzanna Pusz told the Telegraph that the market would be watching closely for any signs of takeover interest by LVMH over the coming year.
“Generally at LVMH, they try to run the business with an efficient use of their balance sheet. They make sure to have some minimum level of net debt and they do not want to go into a net cash position,” Ms Pusz says.
“On our estimates, they will be in a net cash position early next year so they will have the balance sheet firepower and that naturally leads to speculation that they will be on the lookout for something,” she adds.
