Coach Inc (NYSE:COH) shares rose the most in four months, with traders citing a retail industry news website report that French luxury products company LVMH Moet Hennessy Louis Vuitton SA was interested in buying the handbag maker.
LVMH has been attracted by Coach's turnaround efforts to move from selling classical high-end luxury accessories to ready-to-wear apparel, primeretailer.com said, citing sources.
Coach said it did not comment on rumors and speculation. LVMH declined to comment.
Coach, founded in 1941 in a Manhattan loft, has reported declining sales for five quarters in a row, losing market share to newer entrants such as Michael Kors Holding Ltd and Kate Spade & Co.
The company's recent fashion shows and products, however, have appealed to LVMH's design team, one of the sources told primeretailer.com.
"Even though LVMH has expressed its interest to acquire more brands, it's unclear whether with Coach there's a potential acquisition looming or it's more of a competitive interest," the website said.
"Given the profiling of LVMH and recent developments with Coach, former is suspected."
LVMH bought Italian peer Bulgari in 2011 to boost its jewelry business.
Coach shares were up 3.5 percent at $34.78 on the New York Stock Exchange on Thursday afternoon, after rising as much as 4.6 percent.
Coach's options volume at 37,000 contracts in the U.S. options market was about 4.7 times normal by 1.30 p.m. ET, according to options analytics firm Trade Alert data.
The volume on calls - often used to bet on advances in share price - at 30,000 was four times put options. The ratio is towards the higher end of its range this year, indicating a bullish sentiment.
The stock had fallen over 40 percent this year through Wednesday.
(Reporting By Yashaswini Swamynathan in Bengaluru and Saqib Ahmed in New York; Editing by Joyjeet Das)