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(Il Sole 24 Ore Radiocor Plus) – The American luxury group Tapestry – which has brands such as Coach, Kate Spade and Stuart Weitzman in its portfolio – buys Capri Holdings, the company of the Versace, Jimmy Choo and Michael Kors brands for 8.5 billion of dollars. This was announced in a note according to which Tapestry and Capri have reached a definitive agreement. Capri Holdings shareholders will receive $57 in cash per share.
New hub with 12 billion dollars in revenues and almost 2 in operating profit
The combined combined entity has revenues of more than $12 billion with a presence in more than 75 countries and reported nearly $2 billion of adjusted operating income in fiscal 2022. The combination of Coach, Kate Spade and Stuart Weitzman with Versace, Jimmy Choo and Michael Kors “creates a powerful new global luxury house” and represents a unique opportunity “to generate added value for customers, employees, our community and shareholders around the world” pointed out Tapestry CEO Joanne Crevoiserat.
Exploits on Wall Street, synergies expected for 200 million dollars
In the pre-market on Wall Street, Capri Holdings shares – which traded at 34.61 dollars per share at yesterday’s close – mark +59% at 55 dollars per share. Tapestry shares, on the other hand, are down about 3.5%. The transaction, explained Tapestry’s chief financial officer and chief operating officer, Scott Roe, will be “immediately accretive on an adjusted basis” and will improve the overall return for Tapestry’s shareholders: run-rate cost synergies are estimated to over 200 million dollars within three years of the closing of the operation and the cash flows, explained the manager, will allow the group to continue investing and to reduce the debt in line with the commitment to maintain an investment grade rating.