Giordano's price rises on rumours of a suitor
Speculation that Spanish clothing giant Inditex was wooing Giordano International sent the Hong Kong-listed apparel chain up as much as 5.7 per cent yesterday before it dismissed talk of a suitor.
Hong Kong newspaper Sing Pao quoted market talk in Spain yesterday that the Madrid-listed Inditex had approached Giordano over a possible takeover to help it expand its sales in mainland China and Hong Kong.
A Giordano spokesman said the firm had had no contact with Inditex at the moment, Reuters reported.
Inditex, which operates fashion chains including Zara, was not available for comment yesterday.
Giordano shares closed up 1.06 per cent, or 7 HK cents higher, at HK$6.69, compared with a 0.46 per cent fall in the benchmark Hang Seng Index, after rising 5.74 per cent to HK$7. Giordano's shares have surged 50 per cent over the past three months, hitting a record HK$7.58 on May 30 after New World Development chairman Cheng Yu-tung bought 17.8 million Giordano shares.
Cheng is now the largest single shareholder of Giordano after raising his stake through several purchases to 18.07 per cent. He said he had no intention of taking over the retailer, but considered it a good investment.
Analysts said Giordano shares were trading at a 2011 price-to-earnings ratio of 18 times, and were no longer cheap compared with its peers.
Jackson Wong, vice-president at Tanrich Securities, said the share price had jumped too much for people to get in at this point, although there was still some upside, Reuters reported.
Inditex is the world's largest clothing retailer with a market value of US$20 billion and 100,000 employees globally. The brand owner of Zara, Pull & Bear and Massimo Dutti has more than 5,000 shops worldwide.
Inditex has been named as a potential buyer of Giordano in the past, and the Spanish retailer said last year that it hoped to expand in Asia in future through its online shopping website, especially in mainland China and Taiwan.