Greek jeweler Folli Follie doubled its holding in Hellenic Duty Free Shops yesterday, with its shares gaining about 5 percent as investors bet the move would boost profits. The jeweler bought an additional 24.67 percent stake in Hellenic Duty Free Shops (HDFS) for about 203 million euros from telecoms equipment retailer Germanos, raising its holding to just over 49 percent. Folli Follie, which designs, produces and sells jewelry, watches and accessories, has operations in Europe and Asia and 300 outlets. Last year, net profit was 56.7 million euros. «The deal is EPS (earnings per share) accretive over the 2006-2008 period,» Marfin Analysis said in a note. «Luxury goods and retail travel businesses are highly related, thus synergies could possibly be derived from the move.» Analysts said the company would benefit both strategically and financially from the acquisition, which Folli Follie said would be financed by a short-term loan. HDFS has exclusive rights to operate 85 duty free and other retail stores in airports, ports and border stations in the domestic market until 2048. Its shares rose 1 percent at 15.16 euros. Last week Germanos offered to sell its entire stake in HDFS to concentrate on core activities, a move analysts said was closely related to Greek mobile operator Cosmote’s plans to buy a major stake in Germanos. Cosmote announced last week it was in talks with Germanos’s major shareholder to buy a 34.3 percent stake worth around 500 million euros, in a bid to boost its distribution network at home and in the Balkans. Folli Follie’s shares trade at 12 times 2006 estimated earnings, at a discount to the 19.4 multiple for the European luxury goods sector. HDFS trades at 18.1 times its 2006 estimated earnings, a small discount to a 20.6 multiple for the European specialty stores’ sector, according to Reuters Estimates.