The U.S. District Court for the Southern
District of New York granted the U.S. Federal Trade Commission’s
motion for a preliminary injunction to block Tapestry Inc.’s (TPR)
8.5 billion dollar acquisition of Capri Holdings Limited (CPRI).
Capri shares closed Thursday’s regular trading session at 41.60 dollars,
down 0.21 dollars or 0.50 perent. The stock further dropped 18.75 dollars or 45.07 perent in
after-hours trading.
But Tapestry shares closed regular trading at 44.47 dollars, up 0.93 cents or
2.14 percent. In the after-hours trading the stock further gained 6.18 dollars or
13.90 percent.
Following the court ruling, Capri announced its intention to jointly
file a notice of appeal with Tapestry to the U.S. Court of Appeals
for the Second Circuit.
Tapestry called the court ruling disappointing, stating that it
believes the decision is incorrect on both the law and the facts. The
companies intend to appeal the decision in line with their
obligations under the merger agreement.
In April 2024, the U.S. Federal Trade Commission sued to block
Tapestry’s 8.5 billion dollar acquisition of Capri Holdings, a deal aimed
at combining three close competitors: Tapestry’s Coach and Kate Spade
brands and Capri’s Michael Kors brand. If approved, the acquisition
would eliminate direct competition between Tapestry’s and Capri’s
brands, giving Tapestry a dominant share of the ‘accessible luxury’
handbag market, according to the FTC.
Tapestry and Capri currently compete on everything from clothing to
eyewear to shoes.
In August 2023, Tapestry said it agreed to acquire Capri Holdings for
a total enterprise value of about 8.5 billion dollars.(DPA)