Puma share price falls

Recent takeover speculation surrounding sportswear manufacturer Puma SE cooled somewhat on Thursday.

Puma's share price fell 4.3 percent to 22.28 euros. This made its shares among the biggest losers on the MDAX by midday. The share price had jumped by almost 17 percent to 23.28 euros midweek. One month ago, the share price hit a low of 17.045 euros, a level not seen since 2016. The year-to-date loss still stands at nearly 50 percent, placing Puma last on the MDAX.

An article in Manager Magazin about the plans of majority shareholder family Pinault, which built on other media reports, had boosted the share price on Wednesday. According to the reports, two interested parties, the financial investor CVC and the US brand management company Authentic Brands Group (ABG), are already warming up. Recently, there had been speculation about a possible takeover by domestic competitor Adidas. This was fuelled by the Pinault family's statement that it no longer pursued a strategic interest in its stake in Puma.

Analysts were rather critical of the speculation on Thursday. Wendy Liu of JPMorgan stated that after closer examination of the information available so far, she maintained her assessment that an imminent Puma takeover was unlikely. She saw no clear catalyst for a share price increase based on Puma as an independent company. Liu continues to rate the share as "Underweight" with a price target of 16 euros. This is 28 percent below the current valuation.

Adam Cochrane of Deutsche Bank Research also has doubts about the solidity of the recent takeover speculation. He stressed that ABG did not seem to be a credible candidate for the takeover of the company with more than 50 brands. As Puma, under its new CEO, plans to announce its new strategy at the end of October along with its quarterly figures, it might make sense to seek a transaction before any potential change in strategic direction. Cochrane continues to rate Puma as "Hold" with a price target of 20 euros.

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