Versace, Kate Spade combine in $8.5 billion luxury brands takeover

Capri Holdings  (CPRI) – Get Free Report shares soared higher Thursday after the owner of the Michael Kors and Versace luxury brands agreed to an $8.5 billion takeover by Tapestry Inc.  (TPR) – Get Free Report

Tapestry, which owns the Coach stable of luxury brands, agreed to pay $57 per share, in cash, for all of Capri’s outstanding stock, a level that suggests a 65% premium to its Wednesday closing price of $34.61 each. The price values Capri at around $8.5 billion.

The two companies said the deal would unit six luxury brands, including Kate Spade, Jimmy Choo and Stuart Weitzman, that would generate a combined $12 billion in annual revenues and nearly $2 billion in operating profits. 

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“We are excited to announce the acquisition of Capri Holdings – uniting six iconic brands and exceptional global teams,” said Tapestry CEO Joanne Crevoiseerat. “The combination of Coach, Kate Spade, and Stuart Weitzman together with Versace, Jimmy Choo, and Michael Kors creates a new powerful global luxury house, unlocking a unique opportunity to drive enhanced value for our consumers, employees, communities, and shareholders around the world.” 

Capri Holdings shares were marked 58.6% higher in pre-market trading following confirmation of the deal, which was first reported by the Wall Street Journal, to indicate an opening bell price of $54.90 each. 

Tapestry shares, meanwhile, were marked 3% lower at $40 each, tipping the stock into negative territory for the year.

“We are confident this combination will deliver immediate value to our shareholders,’ said Capri CEO John Idol. “By joining with Tapestry, we will have greater resources and capabilities to accelerate the expansion of our global reach while preserving the unique DNA of our brands.”

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