Dr Tony O'Reilly, chairman of Waterford Wedgwood, is examining possible bids for Coach and the watchmaker Jaeger-LeCoultre in an effort to transform the Irish crystal and china company into a leading stable of luxury brands.
Sara Lee, the US meat and coffee group that owns Coach, the leather goods company, is planning an initial public offering of 20 per cent, but analysts believe it would be open to bids as it seeks to simplify its portfolio.
Jaeger-LeCoultre is part of Les Manufactures Horolog'eres (LMH), the luxury watch subsidiary of Mannesmann, that has come on the market after Vodafone AirTouch took over the German telecoms company.
Coach had sales of $550m (€572.26) last year and analysts believe that strong interest in LMH may send the takeover price for the watch group above $900m. Waterford Wedgwood which had sales of €880m last year and €311m of debt would struggle to afford both companies.
However, Dr O'Reilly said: "I have no doubt Coach is something we'll discuss and we will certainly take a look at the Mannesmann business."
He said the group could make acquisitions in the $200m-$500m range without raising new funds, but added that he was examining financing options for larger deals. "If you issue stock at a p/e of four you're a fool, but for the right acquisition, with Waterford Wedgwood stock trending upwards, we could issue convertible preferred stock or various types of warrants."
Dr O'Reilly, who will retire as chairman of HJ Heinz in September after 30 years with the food company, said he intended to divide his time equally between Waterford Wedgwood and the Independent News and Media group.
"My long-term ambition for Waterford Wedgwood is to make it a luxury goods company that represents the best of the best in the world. It has just got to make two or three really important takeovers."
The group would concentrate on acquisitions in existing areas, and in leather goods and watches, rather than in the more "ephemeral" fashion-driven areas of the luxury goods market, said Dr O'Reilly, who is the largest shareholder of Waterford Wedgwood.
Richemont, the luxury goods group, appears to have the upper hand in the auction, having joined forces with Audemars Piguet, the Swiss watch group, which owns 40 per cent of Jaeger-LeCoultre.
