Capri Holdings Stock Drops By Half After Judge Blocks Tapestry Merger
Capri Holdings Ltd (NYSE:CPRI) shares are tanking in Thursday’s after-hours session following reports that a judge has blocked the company’s pending merger with Tapestry Inc (NYSE:TPR).
What To Know: Following an eight-day trial in which the U.S. Federal Trade Commission argued that a merger between Capri and Tapestry would remove competition from the U.S. handbag space, a U.S. judge has moved to block the pending merger, according to Reuters.
Capri owns Michael Kors, Versace and Jimmy Choo brands, and Tapestry owns Coach, Kate Spade and Stuart Weitzman brands. The two companies are the largest handbag makers in the U.S.
The FTC reportedly said the merger would result in rising prices that would be unfair to consumers.
Tapestry had been pushing back against those claims, arguing that the merger was necessary to remain competitive with large European luxury handbag brands gaining share. The two U.S. handbag makers also argued the deal would actually increase competition in the space.
Tapestry’s lawyers reportedly said Thursday’s ruling in effect permanently shuts down the proposed deal. Tapestry shares were up 10.97% in extended trading at last check, while Capri shares plunged.
CPRI Price Action: Capri shares were down 44.78% at $22.97 at the time of publication Thursday, according to Benzinga Pro.
Photo: Jarosław Igras from Pixabay.
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