PARIS (Reuters) - Britain's Burberry <BRBY.L> and U.S. firm Coach <COH.N>> are not in active merger talks, sources familiar with the matter said on Friday, in reaction to a report that suggested the two fashion companies were considering a tie-up.
"This is completely speculative. There are no negotiations underway, Burberry is not talking to Coach," one of the sources said. Another source with first-hand knowledge of the matter said such a plan could not be on the cards since the two companies pursued very different strategies.
Burberry declined to comment.
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Burberry and Coach shares rose sharply after financial blog Betaville said, citing sources, that Coach was working with investment bank Evercore on a potential merger with Burberry.
Burberry shares rose nearly 5 percent on Friday and by 1315 GMT they were up 3.51 percent at 1,501 pence valuing the British company at 6.43 billion pounds ($7.84 billion).
"Contrary to Coach, most of the efforts at Burberry in the past 20 years have gone in the direction of elevating the brand and moving it into mega-brand price territory, rather than squarely into accessible luxury," Exane BNP Paribas analyst Luca Solca.
"A merger of Coach and Burberry would primarily be a merger of problems," he said, adding there were few examples of mergers in the sector that had successfully helped a brand regain momentum and drive up sales.
Burberry reported a drop in first-half sales on Tuesday, hitting its shares as weak demand from U.S. department stores offset a surge in sales in its home market as tourists took advantage of a lower pound.
(Reporting by Astrid Wendlandt and Pamela Barbaglia in London; editing by Michel Rose and Susan Thomas)