Michael Kors owner
Capri
Holdings’ stock surged 58% ahead of the open Thursday as rival
Tapestry,
parent of the Coach brand, announced a deal to buy the global luxury fashion group.
Capri shareholders will receive $57 per share in cash, a 65% premium to Wednesday’s closing price, in a deal that values the company at $8.5 billion. Capri’s market capitalization at Wednesday’s close was $4.06 billion.
The merger would leave the combined company better placed to compete with the likes of
LVMH
Moët Hennessy Louis Vuitton and Gucci parent
Kering.
Capri (ticker: CPRI), which also owns fashion brands Versace and Jimmy Choo, was due to report fiscal first quarter earnings Tuesday but rescheduled to Thursday with a day’s notice.
Capri stock is down 39% this year as of Wednesday’s close, but the hefty premium in the deal is giving it a boost in premarket trading. Tapestry (TPR) stock, which has climbed 8.3% so far in 2023, fell 5.4% ahead of the open.
Fashion deals have been in vogue in recent years, most notably as French luxury giant LVMH acquired Tiffany & Co. in 2021. Tiffany was a key contributor to the 10% profit growth posted by the group’s Watches & Jewelry segment in the first half of 2023, LVMH said when it reported earnings last month.
Rival European fashion group Kering announced a deal to buy a 30% stake in Italian luxury fashion house Valentino for 1.7 billion euros ($1.87 billion) in July. It includes an option to buy 100% of Valentino by 2028.
Write to Callum Keown at [email protected]
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