Coach Inc. (NYSE: COH) is trading higher on Wednesday on unconfirmed reports from the site DealReporter that the luxury goods purveyor is exploring a sale of the company. The first thing we would note about this report is that shareholders may have every right to revolt, because it would take a really large premium to buy the company and not bury the existing shareholder base with forced losses.

Another issue is that the company has a very fresh press release, not even two hours old, in which the company said it has appointed Zach Augustine to executive vice president of Global Environments and also has named Erin Thomson as vice president and Artistic Director of Global Environments. Augustine comes from Nike Inc. (NYSE: NKE) and will oversee the new visual presentation inside Coach stores and the architecture or design of the stores.

So here is why the deal would be hard to do. Shares closed at $46.50 on Tuesday, against a 52-week range of $45.87 to $79.70. That would take a 71% premium to get up to a year high. Even if the buyout did not have to come up at that high of a level, you would expect that a serious premium would have to be paid. The other issue is that, even this close to a 52-week low, the market capitalization rate of Coach is just above $13 billion. A buyout at the 52-week high would imply a $22.2 billion deal, and that seems unlikely in this space.

Maybe Coach needs to consider the other alternative of breaking up its units. That comes with a huge risk, but Coach may just be too big to buy.

Speculators are proving that they are willing to chase any rumors all over again. The stock was up more than 5% at $49.00 in the premarket trading.

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