Bloomberg reported Thursday that Kering, which owns brands including Gucci and Yves Saint Laurent, has held early talks with high-end ski jacket maker Moncler about a possible deal. No price was given but Moncler’s current market capitalisation in Milan is €10.6bn (£8.9bn, $11.7bn).
Shares in Moncler rose 8.8% on the news, while Kering stock climbed 1.2%.
Kering declined to comment. Moncler couldn’t immediately be reached for comment.
Bank of America said a deal would not be a surprise given consolidation elsewhere in the industry. LVMH, the luxury group that owns Louis Vuitton, recently announced a deal to buy jewellery group Tiffany & Co. for $16.2bn, the biggest ever takeover in luxury.
“If this deal were to take place, we believe it would be a good addition to Kering's portfolio,” Bank of America analysts wrote in a note to clients on Thursday.
“The French conglomerate is facing a deceleration of its sales growth at Gucci which can only partly be offset by the solid momentum seen in its other Houses — something which is impacting the group valuation, at a 20% discount to the luxury sector.”
Kering, which has a market value of €67.8bn (£57.3bn, $75bn), gets 80% of its profits from Gucci and investors have become nervous about this arrangement as sales have slowed.
UBS analysts said a takeover of Moncler would “likely be welcomed by the shareholders of both companies” but added: “In our view the biggest difference between the parties is likely to be on price, given that from Moncler's shareholders' perspective the business can continue to thrive as stand-alone.”
UBS said Kering may have to pay as high as €57 per share for Moncler, representing a huge 46% premium on Wednesday’s closing price.
“Kering's shareholders might question the timing and price of the deal, and what value the group could bring to the Moncler brand,” the Swiss bank said.
Moncler was founded in 1952 as an Italian ski-wear manufacturer but has moved into luxury fashion in recent decades. The company’s trendy ski jackets — which can cost £1,000 or more — have become a common sight at fashion weeks around the world and the brand has benefited from the rise of uxury street-wear style in recent years. Moncler’s stock has risen almost 200% over the last five years.
“Moncler has been a monobrand success story unmatched by other listed peers,” UBS said.