Capri Shareholders Sign Off on Sale to Tapestry
Capri Holdings gave its thumbs-up to the company’s sale to Tapestry Inc. during a special meeting on Wednesday.
That puts the mega deal one big step closer to completion, with the final closing date expected to come in 2024.
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The acquisition is set to give Capri, which owns Michael Kors, Versace and Jimmy Choo, a valuation of $8.5 billion, including the company’s debt and shares, which are being bought for $57 each.
While fashion brands are big on packaging, promoting and selling emotions of one sort or another, the decision to go through with the sale was very corporate and very quick considering shareholders had the ability to vote by proxy.
John Idol, chairman and chief executive officer of Capri, called the virtual shareholder meeting to order at noon on the dot, laid out the agenda and named a secretary and an inspector for the meeting.
The polls opened at 12:06 p.m. and closed a minute later. The deal was approved and the meeting adjourned.
Regulators have to also weigh in with antitrust approvals before Tapestry, which already includes Coach, Kate Spade and Stuart Weitzman, can take its big leap ahead.
All together, the six brands now owned by the two companies have annual sales of more than $12 billion.
While shares of Capri closed $5.75 below the deal price on Wednesday — allowing for some kind of last-minute hiccup — Tapestry’s stock has trended downward as the company prepares to take on the challenges and risks of a mammoth integration.
Shares of Tapestry closed down 0.2 percent to $27.86 on Wednesday, leaving the stock down 31.7 percent since the acquisition was revealed on Aug. 10.
Tapestry is also levering up on debt to bring the deal home.
Scott Roe, Tapestry’s chief financial officer and chief operating officer, told analysts when the deal was cut that the company had secured $8 billion in bridge financing for the deal. At close, the company expects to have a debt-to-earnings before interest, taxes, depreciation and amortization ratio of under 4-times and Roe expects to bring that down to 2.5-times within two years by paying down debt and growing profits.
Perhaps it’s that debt load that’s ramped up speculation in some financial circles that Tapestry might seek to sell off some assets once the deal is closed.
Idol was fielding outside interest in Versace and Jimmy Choo earlier this year.
But Tapestry has previously signaled that it plans to keep the gang together.
Joanne Crevoiserat, president and CEO of Tapestry, said in August: “From a portfolio standpoint, we’re pulling together six iconic brands that we see tremendous opportunity to drive growth. And our focus for integration is to make sure that we’re leveraging the power of our platform to help advance and accelerate the strategic agenda of the brands on our platform. So that’s our near-term focus.”
Roe added: “These are great brands and we’re excited to be the owners of these brands and look forward to maximizing the value. We think we’re a good owner and we have a lot to offer here.”
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