image: Kate Spade image: Kate Spade

Recent Kate Spade sale rumors are being coupled with reports of insider trading. Minutes before Dow Jones reported that Kate Spade is exploring a sale of its business, one options trader purchased nearly 2,000 calls – paid-for options to purchase the New York-based fashion brand’s stock at an already agreed-upon price – resulting in a quick $320,000 profit.

Options trading tends to operate heavily around specific events, such as a company’s release of its earnings reports or the impending release of a legal judgment but is also frequently used on a less event-specific basis, for the purpose of hedging other investments. With this in mind, the unnamed (and likely unknown) trader’s purchase – which took place at 12:23 p.m. on December 28 – seem somewhat run of the mill. That is until 10 minutes later when Kate Spade made headlines for reportedly preparing to sell off its company. The timing for the trade has led to suspicions of insider trading as first reported by CNBC analysts.

The U.S. Securities and Exchange Commission has declined to comment on whether it will investigate the trading activity at issue, and Kate Spade did not immediately respond to a request for comment regarding the trade allegations.

So, what companies are expected to make a play for Kate Spade, which plans to kick off a formal auction process this month, with interest from six possible bidders, according to a person familiar with the situation? Wells Fargo analyst Ike Boruchow said several brand houses — namely, VF Corp, PVH, Hanesbrands, Michael Kors and Coach — have said they are looking to make an acquisition. Boruchow said Kate’s valuation was “compelling” since the shares have been punished for the company’s recent choppy earnings reports.

VF Corp and Michael Kors, which are typically quiet on the options front, both saw heightened activity on Wednesday.  “We know that both Coach and Kors each have cash and want to make a purchase of another brand,” Telsey Advisory Group’s Dana Telsey told CNBC on Wednesday. “You certainly have in Kate a long runway of potential growth ahead.”

More athletic-focused brands may be less of a good fit, said Kay Koplovitz, a former Kate Spade board member, told Bloomberg. The bidder would need to cultivate Kate Spade’s role as a “whimsical” brand aimed at millennial career women, Koplovitz said. If it is purchased by an apparel conglomerate with lots of labels, there’s a danger of “homogenizing” the business, she said.

Spokespersons from Michael Kors, Coach and VF Corp each told CNBC that their companies do not comment on rumors or speculation.