CPRI - Capri Holdings: Market (Mistakenly?) Shows Little Confidence In This Luxury Deal

2024-03-12 15:59:52 ET

Summary

• Tapestry, Inc. is buying Capri Holdings Limited for $57 per share, but the deal is facing scrutiny and is trading at a wide spread.
• The merger between the two companies would create the fourth-largest luxury goods company with a combined market share of around 5%.
• Analysts see a 70% chance that the Tapestry deal will close, but there are concerns about the relevant market size and Capri Holdings Limited's earnings profile.

Tapestry, Inc. ( TPR ) is buying Capri Holdings Limited ( CPRI ) for $57 per share. This deal was announced in August 2023, but has unfortunately been subjected to a 2nd request (I covered the 2nd request here ). The deal is trading at a very wide spread as if it is pretty likely it will fail. Capri shares are trading at $46.86. If the deal closes as planned, the upside is 21.63% from here. The EU regulator has set a deadline for a decision on whether the deal needs a phase II investigation on 15-4-2024....

For further details see: