Following a week of feverish market speculation, LVMH said in a one-line statement early on Wednesday that it had no immediate plans to make a bid for Gucci.

However, in a surprise appearance at a Giorgio Armani fashion show in Milan, LVMH chairman Bernard Arnault stressed that the earlier statement had only ruled out ``a full bid.''

Arnault told Reuters the statement said, ``We're not going to make a full bid under present circumstances.''

He added in remarks to Italian news agency ANSA, ``I won't launch a takeover bid (for Gucci), I have more than 15 per cent but I can't say how much.''

But industry analysts said they were confident that LVMH was preparing the ground for some kind of move for the Dutch-listed Gucci.

``Whether LVMH has 15 per cent or 20 likelihood of a full takeover this year must be getting close to 100 per cent,'' said Lehman Brothers analyst John Wakely.

Arnault's unexpected appearance at the Armani show sparked speculation in Milan's fevered high-fashion circles that Arnault could be seeking closer links with Armani as well.

LVMH Moet Hennessy Louis Vuiton, the world's largest luxury goods manufacturer, revealed a more than five-per cent stake in Gucci, known for its exclusive handbags, scarves and shoes.

On Monday, LVMH said it would raise its Gucci stake to more than 14 per cent by agreeing to buy a 9.5-per cent ownership interest in the company from Italian design house.

LVMH's moves sparked investor speculation about a takeover, but there was concern that a hostile bid could alienate Gucci chairman Domenico De Sole and Gucci creative director Tom Ford.

Under stock market rules, LVMH was obliged to state its intentions toward Gucci, whose shares have climbed 36 per cent in the past two weeks on the takeover speculation.

In its terse statement early on Wednesday, LVMH said ``Following information in the Italian press today, the Group LVMH makes clear that it does not plan, under the current circumstances, to launch a bid for Gucci Group NV.''

In reaction, LVMH shares in Paris on Wednesday closed off 6.5 per cent, or 13.4 euros, at 193.0 euros.

Gucci shares see-sawed wildly on the Amsterdam exchange to close off 4.8 per cent, or 2.8 euros, at 55.1 euros amid weak equities trading across Europe. In early afternoon trading in New York, Gucci was off 81.25 cents at $69.25 a share.