Capri Holdings Files Notice of Appeal

Rhea-AI Summary

Capri Holdings (NYSE:CPRI) announced its intention to jointly file with Tapestry, Inc. a notice of appeal to the U.S. Court of Appeals for the Second Circuit. This appeal challenges the U.S. District Court for the Southern District of New York's decision to grant the Federal Trade Commission's motion for a preliminary injunction that blocks Tapestry's pending acquisition of Capri Holdings.

Positive

• None.

Negative

• FTC's preliminary injunction blocks Tapestry's acquisition of Capri Holdings
• Legal obstacles potentially jeopardizing the merger completion
• Additional delays and uncertainty in the acquisition process

Insights

Legal Expert

The appeal filing against the FTC's preliminary injunction marks a critical development in the 8.5 billion Tapestry-Capri merger saga. The District Court's decision to block the deal significantly impacts the luxury fashion landscape, as it would have created America's largest luxury fashion conglomerate. The appeal process could extend several months, introducing substantial uncertainty for both companies.

The legal hurdles center on antitrust concerns, particularly regarding market concentration in the accessible luxury segment. The success rate for overturning preliminary injunctions in merger cases is historically low, approximately 20%. This development may force both companies to either restructure the deal terms or consider abandoning the merger altogether, which could trigger a 500 million termination fee.

Financial Analyst

This appeal represents significant market implications for both entities. For Capri Holdings, the continued uncertainty affects its strategic positioning and potential operational improvements that were expected from the merger. The stock price volatility will likely persist throughout the appeals process, with downside risk if the merger ultimately fails.

The market's primary concerns include:

• Delayed synergy realization of projected 200 million in cost savings
• Uncertainty in executing standalone growth strategies
• Potential impact on Capri's brand portfolio optimization

Investors should closely monitor legal proceedings as the outcome will significantly influence Capri's future trajectory and valuation metrics.

LONDON--(BUSINESS WIRE)-- Capri Holdings Limited (NYSE:CPRI), a global fashion luxury group, today reported that, consistent with the requirements of the merger agreement, it intends to jointly file with Tapestry, Inc. a notice of appeal to the U.S. Court of Appeals for the Second Circuit regarding the U.S. District Court for the Southern District of New York’s decision to grant the U.S. Federal Trade Commission’s motion for a preliminary injunction to block Tapestry, Inc.’s pending acquisition of the Company.

(Photo: Business Wire)

About Capri Holdings Limited

Capri Holdings is a global fashion luxury group consisting of iconic, founder-led brands Versace, Jimmy Choo and Michael Kors. Our commitment to glamorous style and craftsmanship is at the heart of each of our luxury brands. We have built our reputation on designing exceptional, innovative products that cover the full spectrum of fashion luxury categories. Our strength lies in the unique DNA and heritage of each of our brands, the diversity and passion of our people and our dedication to the clients and communities we serve. Capri Holdings Limited is publicly listed on the New York Stock Exchange under the ticker CPRI.

Forward-Looking Statements

This press release contains statements which are, or may be deemed to be, “forward-looking statements.” Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Capri about future events and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. All statements other than statements of historical facts included herein, may be forward-looking statements. Without limitation, any statements preceded or followed by or that include the words “plans”, “believes”, “expects”, “intends”, “will”, “should”, “could”, “would”, “may”, “anticipates”, “might” or similar words or phrases, are forward-looking statements. Such forward-looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and are based on certain key assumptions, which could cause actual results to differ materially from those projected or implied in any forward-looking statements, including regarding the pending merger between Tapestry, Inc. and Capri Holdings Limited. These risks, uncertainties and other factors are identified in the Company's Annual Report on Form 10-K for the fiscal year ended March 30, 2024 filed with the Securities and Exchange Commission. Please consult these documents for a more complete understanding of these risks and uncertainties. Any forward-looking statement in this press release speaks only as of the date made and Capri disclaims any obligation to update or revise any forward-looking or other statements contained herein other than in accordance with legal and regulatory obligations.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241024593346/en/

Investor Relations:

Jennifer Davis

+1 (201) 514-8234

Jennifer.Davis@CapriHoldings.com

Media:

Press@CapriHoldings.com

Source: Capri Holdings Limited

FAQ

Why is Capri Holdings (CPRI) filing an appeal in 2024?

Capri Holdings is filing an appeal to challenge the U.S. District Court's decision that granted the FTC's motion for a preliminary injunction blocking Tapestry's acquisition of the company.

What court granted the preliminary injunction against CPRI's acquisition?

The U.S. District Court for the Southern District of New York granted the FTC's motion for a preliminary injunction to block the acquisition.

Where is CPRI filing its appeal regarding the Tapestry acquisition?

Capri Holdings is filing its appeal with the U.S. Court of Appeals for the Second Circuit.