Hermes shares slide after LVMH rules out takeover bid

Hermes store Hermes saw profits surge last year on the back of demand for luxury goods in developing markets

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Shares in French luxury goods group Hermes have fallen more than 5% after rival LVMH said it had "no intention" of launching a takeover bid.

There had been widespread speculation that LVMH, the world's largest luxury goods company and owner of Louis Vuitton and Moet & Chandon champagne, may make a bid for Hermes.

LVMH's denial was sparked by reports on Thursday that a takeover bid was imminent.

It already owns about 20% of the group.

"The LVMH group has absolutely no intention of making a bid for Hermes," a spokesman for the company said.

Record revenue

Sales at both groups have risen sharply, partly thanks to surging demand in developing economies such as China.

Hermes made a net profit of 421m euros ($610m; £374m) in 2010, a rise of almost 50% on the previous year, with sales rising by a quarter to 2.4bn euros.

It plans to open 13 new stores this year.

LVMH saw record revenues of more than 20bn euros in 2010, with operating profit up by almost a third.

Earlier this year, the group agreed a 3.7bn euros deal to take over Italian jeweller Bulgari.

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